United Kingdom: Manufacturing PMI slides in October
November 2, 2016
In October, the manufacturing sector deteriorated slightly compared to the impressive improvement recorded in the previous month. The manufacturing IHS Markit/CIPS Purchasing Managers’ Index (PMI) decreased from 55.5 in September to 54.3 in October. Last month’s reading had marked the highest figure in nine months. Despite the decrease, the index remains well above the 50-threshold that separates expansion from contraction in business conditions.
October’s slight deterioration was due to a slower increase in manufacturing output, even though growth was solid compared to the historical average. Intermediate goods was the strongest performing sub-sector, where production increased at the fastest pace in a year. IHS Markit/CIPS analysts added that, “a major feature of the latest survey was the effect of the depreciation of the sterling exchange rate. Manufacturers reported that this aided efforts to increase inflows of new export business, resulting in new orders from the USA, the EU and China.”
Author: Dirina Mançellari, Senior Economist