United Kingdom PMI February 2016

United Kingdom

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.”

FocusEconomics Consensus Forecast panelists see fixed investment rising 4.0% in 2016, which is down 0.4 percentage points from the previous month’s estimate. For 2017, the panel expects fixed investment to increase 4.4%.

Author:, Senior Economist

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United Kingdom PMI Chart

United Kingdom PMI February 2016

Note: Markit/CIPS United Kingdom Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Markit and CIPS.

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