UK manufacturing growth report indicated slower growth, reaches seven-month low

Brexit economy

Published on February 1, 2018, UK manufacturing PMI indicated a sluggish growth during the first month of 2018. According to data, IHS Markit manufacturing PMI declined to a seven-month low of 55.3 from its previous reading of 56.2 in December of last year. This marked the weakest reading since mid-2017, despite of this, record still show that they are above the long run average of 51.7.

PMI survey data indicated UK’s manufacturing sector struggling at the beginning of 2018. Records of 2017 indicated that UK factories did well during the previous year, due to support given by global growth along with the feeble British pound sterling which boosted demand for the UK factory sector.

 

In accordance to this, the report also showed the export growth picked up in January of 2018, indicating that a weaker increase in domestic demand was the cause of the sluggish rise in total new orders seen in the month. Compared to the average rate of progress seen in the second half of the previous year (2017), the data presented on February 1, 2018 indicated an overall manufacturing output which was gradually growing at an estimated quarterly rate of 0.6% in January (2018).

Despite of this, the factory sector is still optimistic about the activity levels in a year’s time, which recovered for a third successive month in the previous month, which according to data rose to the highest since September 2015, this is due to the expectations of stronger demands from overseas markets.

In which, the British pound sterling is still perceived as a major key to UK export gains, as the recovery of UK exports happened alongside a noticeable rise in the Eurozone economy. PMI data mentioned that the recent Eurozone growth which advanced to a 12-year high in January, is likely to improve and boost imports of UK-produce goods.