United Kingdom: Manufacturing PMI improves slightly in May
June 3, 2016
The manufacturing Markit/CIPS Purchasing Managers’ Index (PMI) increased from 49.4 in April to 50.1 in May. April’s figure had marked the lowest level in over three years. As a result, the index is now resting slightly above the 50-threshold that separates expansion from contraction in business conditions. This is the first time the index has crossed the threshold since March 2013.
According to Markit/CIPS, May’s increase was mainly due to expansions in the consumer and intermediate goods sectors. Manufacturing jobs decreased for the fifth consecutive month, however, the reductions were milder compared to the previous month. Markit/CIPC analysts added that, ““Backlogs continued to drop and at the quickest pace for 38 months while purchasing activity slowed for a successive fourth month and firms held on to their cash. It is likely some manufacturers are maintaining a financial shield as a barrier against the uncertainties still affecting the sector, including those arising from the forthcoming EU referendum.”
Author: Dirina Mançellari, Senior Economist