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-UK CIPS July Manufacturing PMI 45.4: Markit/Reuters
LONDON (MNI) – UK manufacturing activity hit a 38-month low in
July, with the sector contracting sharply.
The headline Markit/Chartered Institute of Purchasing and Supply
index from Reuters plunged to 45.4 in July from a revised 48.4 in June,
its lowest reading since May 2009 and well below analysts’ median
forecast for a 48.0 outturn.
Export orders plunged, posting their fastest fall since February
2009. The first of the UK Q3 PMIs shows manufacturing getting off to a
very poor start and suggests it could well act as a drag on the expected
rebound in economic activity in Q3.
The fit between the CIPS surveys and the official growth data,
however, has not been tight.
Markit said its Q2 PMIs showed suggested “a slight 0.1% fall in GDP
growth”, but the official data showed a much sharper contraction of 0.7%
on the quarter.
Markit said the fall in export new orders in July was not only due
to Eurozone weakness.
“The Eurozone market remained the principal drag on new export
orders, although there were also some reports of a decline in new
business received from Asia,” it said.
The fall in manufacturing output in July was the steepest for 40
months.
“Underlying demand remained weak and market conditions highly
competitive. Coming on the back of a 1.4% decline in manufacturing
production in the second quarter, it looks like the sector remains a
major drag on the overall economy,” Rob Dobson, Senior Economist at
Markit, said.
George Buckley, senior UK economist at Deutsche Bank, noted that
the slowdown in manufacturing has been very widespread in July.
The PMIs have “been slowing across the globe; of the 16
manufacturing PMIs for July published so far 11 of them are below 50 and
10 reported a fall in July,” Buckley said in a note.
-London newsroom: +44 207 862 7491; email:drobinson@marketnews.com
[TOPICS: MABDS$,M$B$$$]
