United Kingdom PMI October 2016

United Kingdom

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.”

FocusEconomics Consensus Forecast panelists see fixed investment contracting 0.2% in 2016, which is up 0.6 percentage points from the previous month’s estimate. For 2017, the panel expects fixed investment to drop 2.6%, which is up 1.0 percentage points from last month’s estimate.

Author:, Senior Economist

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United Kingdom PMI Chart

United Kingdom PMI October 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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