United Kingdom PMI January 2016

United Kingdom

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.”

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 January 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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