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UK CommentUK manufacturing sentiment a little stronger than expected in March

  1. Sentiment sideways since January
  2. New orders and employment pulled down, while output pulled up
  3. Sentiment suggests output growth could ease somewhat further
Sentiment sideways since January
The UK manufacturing PMI was a little stronger than expected in March at 55.1 vs. the consensus expectation at 54.7. The February reading was revised slightly lower to 55.0 from 55.2 previously. Hence the UK manufacturing PMI has been moving sideways since January.
New orders and employment pulled down, while output pulled up in March
Sentiment was pulled down in March by a further fall in the sub-index measuring new orders, which fell to a nine-month low. Both export orders and domestic orders have weakened since November last year, but the slide has been more pronounced for domestic orders. Employment growth also weakened in March, according to the survey. On the other hand, sentiment was pulled up by a strengthening of the output measure. On the price front, rates of inflation in input costs and output charges remained elevated despite easing slightly since February.
Sentiment suggests output growth could ease somewhat further
The manufacturing PMI has been sliding since November last year and other sentiment indicators for the manufacturing sector, such as the CBI and EC indices, also point to weakening momentum. Actual manufacturing output growth has also come down from its autumn highs. Based on past form, the PMI output index suggests that manufacturing output growth could ease somewhat further over the near term.


 


Disclaimer

Kari Due-Andresen

Chief Economist Norway

Norway and UK

kadu01@handelsbanken.no

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