UK factories feel pinch from global economy as export orders fall - PMI
LONDON (Reuters) - British manufacturers had their weakest month in over two years and export orders suffered a rare fall in August, a warning that a world economic slowdown, as well as the approach of Brexit, is weighing on the country’s factories, a survey showed.
FILE PHOTO: Workers assemble cars at the plant for the Mini range of cars in Cowley, near Oxford, Britain June 20, 2016. REUTERS/Leon Neal/Pool
The IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) fell to 52.8, its lowest level since July 2016, immediately after the Brexit vote, and a lot weaker than a median forecast of 53.8 in a Reuters poll of economists.
Rob Dobson, an IHS Markit director, said the manufacturing sector — which accounts for about 10 percent of Britain’s economy — looked increasingly lacklustre in August.
“The latest PMI report is broadly consistent with zero growth in manufacturing production, meaning the sector will likely fail to provide any support to the wider UK economy in the third quarter,” he said.
New orders were the weakest in more than two years, weighed down by the first fall in export orders since April 2016, and hiring by manufacturers almost stagnated.
“Some firms linked lower inflows of new work from abroad to the recent weaker pace of expansion of the world economy,” Markit said, adding the recent weakening of the pound had not boosted exports.
The lack of clarity over the terms of Britain’s departure from the European Union in less than seven months’ time helped push business confidence to a 22-month low.
Inflation pressure remained strong, Markit said, although prices charged by manufacturers grew less quickly than in July.
The PMI for Britain’s larger services industry is due to be published on Wednesday, helping to give investors a clearer sense of whether the economy has managed to maintain its recovery from an early 2018 slowdown.
Reporting by William Schomberg; Editing by Toby Chopra
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