United Kingdom PMI

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United Kingdom: Manufacturing PMI inches down in August

September 1, 2015

The manufacturing Markit/CIPS Purchasing Managers’ Index (PMI) inched down from 51.9 in July to 51.5 in August. Despite the decrease, 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 February 2013.

According to Markit/CIPS, August’s result came on the back of a modest increase in manufacturing output. Moreover, new orders also grew because of a strong domestic market. On the cost front in August, purchase prices dropped at the steepest rate in 16 years, reflecting a combination of lower oil prices, a strong sterling and a reduction in the cost of a wide range of raw materials. Markit/CIPS added that, “the sector was on a go slow trajectory this month, showing a disappointingly slow pace of growth, and barely moving from last month’s figure, raising fears this could be an entrenched situation developing in the next few months.”

FocusEconomics Consensus Forecast panelists see fixed investment rising 8.3% in 2015, which is unchanged from the previous month’s estimate. For 2016, the panel expects fixed investment to increase 6.4%.

Author:, Senior Economist

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United Kingdom PMI Chart

United Kingdom PMI August 2015

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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