United Kingdom: Manufacturing PMI dips slightly in November
December 1, 2016
The manufacturing IHS Markit/CIPS Purchasing Managers’ Index (PMI) decreased from 54.2 in October to 53.4 in November. Despite the decrease, the index remains well above the 50-point threshold that separates expansion from contraction in the manufacturing sector.
November’s continued improvement in overall operating conditions was due to growth in production and new orders, with both domestic and foreign demand remaining robust. The weak sterling exchange rate helped exporting firms, which reported increased demand from abroad, while also pushing up producers’ costs; average purchase prices rose at one of the fastest rates in the survey’s history.
According to HIS Markit/CIPS analysts, “The concern is that higher costs may in time offset any positive effect of the weaker exchange rate, especially given that export order book growth has already waned markedly from September’s five-and-a-half year high.”
Author: Dirina Mançellari, Senior Economist