United Kingdom manufacturing growth slows but exports still strong
- Author: David Armstrong Oct 03, 2017,
Oct 03, 2017, 8:12
"The annual MHA Manufacturing and Engineering report released last month found that despite the uncertainty from Brexit, the majority of businesses have achieved growth over the past 12 months and remain optimistic about the future", he said.
The latest IHS Markit/CIPS Manufacturing Purchasing Managers' Index (PMI) posted a figure of 55.9 in September 2017, as expansion in the United Kingdom manufacturing sector continues.
By contrast, euro zone factories had their best month since early 2011.
IHS Markit manufacturing PMI report for September also noted that employment shrank for two consecutive months as the subdued growth of order book allowed firms to work through their backlogs.
Britain's economy initially withstood the shock of the June 2016 vote to leave the European Union.
Input prices rose to the strongest level in four months at 62.6 from 58.7 as U.S. supply disruptions following Hurricane Harvey raised the cost of raw materials.
Analysts said Monday's survey - which showed a resurgence of price pressures - would do little to alter this judgement. Nonetheless, a reading above 50.0 indicates expansion in the sector.
On the price front, input prices rose sharply and output price inflation reached a four-month high in September.
"The weakened pound could also encourage some companies to switch to domestic sources for supplies, which would help manufacturers of intermediate products". "Latest data indicated only a marginal rise in new orders from overseas, which was partly linked to weak demand from US clients". "How will both cost and currency challenges affect lead times and production capacity?"
The Bangko Sentral ng Pilipinas (BSP) on Friday last week estimated that inflation likely clocked 2.8-3.6% in September from August's 3.1%, while BusinessWorld's poll of 13 economists yielded a 3.2% median. The upturn signalled a slight pick-up in growth momentum and a strong improvement in overall operating conditions across the sector.
"I still expect Philippine manufacturing to grow in 2017, especially as more and more investments are anticipated from the government's thrust of increasing infrastructure spending plus the impact of further tax reform when corporate taxes are eventually adjusted to be comparable regionally", added Mr. Dumalagan. "Reports from survey respondents cited improving client demand, a supportive economic backdrop and successful product development", IHS Markit said.