United Kingdom: Manufacturing PMI deteriorates in November
December 1, 2015
The manufacturing Markit/CIPS Purchasing Managers’ Index (PMI) dropped from 55.5 in October to 52.7 in November. October’s figure marked the best result since June 2014. Despite the drop, the index remains firmly entrenched above the 50-threshold that separates expansion from contraction in business conditions. The index has been in positive territory since March 2013.
According to Markit/CIPS, November’s deceleration was mainly due to slower growth of new business. Nevertheless, manufacturing production in November expanded for the 32nd consecutive month. Price pressures remained on the downside with a notable decrease in purchasing costs. Moreover, lower input costs were recorded in November due to falling global commodity prices. On the other hand, there was no major change in staffing levels in November. Markit/CIPC analysts added that, “while the improvement in recent months is a welcome trend, scratching beneath the surface of the manufacturing numbers stills exposes a number of weaknesses. Growth remains heavily focussed on the domestic consumer, while the strong gains at large-scale producers have yet to filter through to SMEs. A broadening of the expansion is necessary if the nascent recovery is to be sustained.”
Author: Dirina Mançellari, Senior Economist