Roundup: British manufacturing PMI slips to 14-month low
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E-mail Xinhua, September 1, 2014
British manufacturing purchasing managers' index (PMI), a gauge of the industry activities, slipped to 52.5 in August from the revised 54.8 in July, recording its lowest reading since June 2013, said Markit Economics Limited on Monday.
The data was well below the market estimates consensus of 55.1.
An index of new orders declined to 52.9 in August from 56.8 the previous month, recording the lowest level since April 2013, said the London-based market survey compiler.
The factory output growth cooled for a fourth month, and the rate of increase in new export orders was the lowest since March 2014, though foreign demand for British manufactured goods increased for the 17th month in a row in August, said Markit.
August also saw further job creation at British manufacturers, with employment rising for the 16th straight month, but the rate of growth slowed, hitting a 14-month low, data also showed.
Rob Dobson, Senior Economist at Markit, commented that it is becoming increasingly evident that British industry is not immune to the impacts of rising geopolitical and global market uncertainty, especially when they affect economic growth and business confidence in Britain's largest trading partner the euro zone.
Dobson expects that the Bank of England will keep a "watchful eye" on the other sectors of the economy for signs they can offset the slowdown in manufacturing before they sending out signal on the timing of the expected move in interest rates.
The central bank will release its monetary policy decision on Thursday.
Martin Beck, senior economic adviser to the EY ITEM Club, warned in a note that:" The combination of today's data suggests that Britain's expansion is in danger of losing its balance."
"In early 2014, investment and exports offered solid support to GDP growth and reduced the economy's reliance on consumer spending and the housing sector. But there is now concern that the UK is in danger of repeating the problems of the past," he said.
Paul Hollingsworth, UK Economist at Capital Economics, estimated a meager 0.2 percent rise in the official measure of manufacturing output in the third quarter of 2014.
Nonetheless, Hollingsworth added:" Even if the sector's recovery has lost a little steam, growth should remain robust over 2014 as a whole. We forecast manufacturing output to rise by three percent in both 2014 and 2015." Endit
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