United Kingdom: Manufacturing PMI drops substantially in February
March 1, 2016
The manufacturing Markit/CIPS Purchasing Managers’ Index (PMI) decreased from 52.9 in January to 50.8 in February, thus reaching the lowest level in nearly three years. 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, February’s deterioration was mainly due a sharp deceleration in output growth. Manufacturing production dropped in February and both the capital and consumer goods industries deteriorated amid weak domestic and foreign demand. Markit/CIPC analysts added that, “demand from the domestic market was weak and there was little hope to be gleaned from export orders which were in a similar downbeat mood. It appears the global slowdown is continuing to challenge markets and though it may be too soon to envisage another financial downturn, the possibility will have crossed the minds of key decision-makers.”
Author: Dirina Mançellari, Senior Economist