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UK CommentPMIs suggest UK activity is stalling

  1. Composite PMI down to 50.2 in August from 50.7 in July
  2. All sectors indicate outlook is weakening
  3. New orders fall at fastest rate in many years
Composite PMI down to 50.2 in August from 50.7 in July
UK PMIs declined further in August. The Services PMI fell to 50.6 in August from 51.4 in July and missed the consensus expectation of 51.0. Earlier in the week, the PMIs for construction and manufacturing also came in weaker than expected in August. The composite PMI fell to 50.2 in August from 50.7 in July. The consensus was 50.5.
All sectors indicate the outlook is weakening
According to the survey, the companies in the services sector saw weaker rises in business activity and new work. At the same time, margins were being squeezed by sharp cost inflation. Future expectations retreated further, with growth projections dropping to the lowest since July 2016. Companies in the manufacturing and construction sectors also reported a deteriorating outlook, with new orders falling at the fastest pace in over seven and ten years respectively.
PMIs suggest UK activity is stalling
Taken together, the PMIs suggest that activity growth in the UK is stalling. In the near term, we expect sentiment to stay subdued and continue to dampen activity as Brexit uncertainty remains high.


 



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Kari Due-Andresen

Chief Economist Norway

Norway and UK

kadu01@handelsbanken.no

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