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UK CommentUK manufacturing PMI weakest in over two years

  1. Headline PMI index down to 52.8 in August from 53.8 in July - weakest since July 2016
  2. Export orders plunging - pulled down by cooling global demand, trade tensions and Brexit uncertainty
  3. Sentiment suggests downside to near-term sector output growth
Headline PMI index down to 52.8 in August from 53.8 in July - weakest since July 2016
The UK manufacturing PMI fell to 52.8 in August from 53.8 in July (revised from 54.0). The consensus expectation was for 53.9 in August. The August PMI reading was the weakest since July 2016 as sentiment was pulled down by all sub components. The output index fell to its lowest level for 17 months and the new orders index fell to a 22-month low, pulled down by the export orders index which plunged into negative territory. Slowing global demand, trade tensions and Brexit uncertainty were cited as reasons for the falling export orders. Expectation for future output fell to its lowest level since October 2016. The weak sector performance had also affected the labour market, with job creation almost stagnating in August, according to the survey.
Sentiment suggests downside to near-term sector output growth
Based on past form, the PMI output index suggests that manufacturing output growth, which has hovered just above 1 percent y-o-y for the past couple of months, could slide to around zero in the near term.


 
 



Disclaimer

Kari Due-Andresen

Chief Economist Norway

Norway and UK

kadu01@handelsbanken.no

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