United Kingdom: Manufacturing PMI improves in January
February 1, 2016
The manufacturing Markit/CIPS Purchasing Managers’ Index (PMI) increased from 51.9 in December to 52.9 in January, thus reaching the highest level in three months. 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, January’s improvement was mainly due an acceleration in domestic demand. Inflows of new work from the domestic market picked up in January. Adding to that, the rate of expansion in output reached a 19-month high. Markit/CIPC analysts added that, “strong competition on the sales side combined with the ongoing weakness of global commodity prices meant that manufacturers saw selling prices and input costs fall further in January. Subdued growth, rising global headwinds and a lack of inflationary pressure provide further cause for the Bank of England to push its first rate increase into the back and beyond of 2016.”
Author: Dirina Mançellari, Senior Economist