United Kingdom manufacturing activity softens in early 2018

According to IHS Markit, which conducted the survey of 450 industrial companies, the reading was broadly in line with the long-run series average of 49.4 since July 2012.

The employment in the manufacturing sector is slightly shrinking.

The PMI's new business index hit a nine-month low in March, marked by a tailing off in growth in export orders - possibly reflecting sterling's recent rally. New business placed at manufacturing companies rose for the fifth consecutive month during March.

"U.S. factories reported a strong end to the first quarter, with the PMI advancing to a three-year high".

The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, fell to 51.0 last month from February's 52.1, well short of a Reuters poll median of 52.8.

Euro zone economic growth has already peaked, a Reuters poll found last month, but the European Central Bank will probably decide this summer to slash its bond purchases if things develop as expected, policymaker Ewald Nowotny said last week.

There are already some positive signs, with the survey of manufacturers used for compiling the PMI figures showing nearly 55% of companies forecast that output will be higher in 12 months' time. Businesses responded to higher demand by increasing staff. March data also showed that cost burdens continued to rise as unfavourable exchange rates pushed up raw materials prices.

Amid reports of lower demand from global markets, new export orders declined for the second consecutive month in March. A headline reading of 50 is neutral.

She said the manufacturing PMI contractions in several other Asian countries and areas clearly suggest some downside risks to regional manufacturing momentum in the months ahead.

"March saw the biggest fall in the manufacturing PMI since June 2011 and the third successive slowing in the pace of expansion", said IHS Markit chief business economist Chris Williamson.

The ISM showed a lower reading on its March manufacturing index, falling to 59.3 from 60.8 in February.

The pound has gained more than 4 percent against the USA dollar since the end of 2017.

As has been the case since last November, Indian manufacturers raised their purchasing activity. It marginally downgraded its GDP forecast to 7.3% for fiscal 2018 year.

  • Tracy Klein