UK PMI manufacturing dropped to 51.1. in October, down from 53.8, missed expectation of 53.0. Market noted that “new orders and employment decline for first time in 27 months” Also, “input cost and output price inflation both ease”.
Rob Dobson, Director at IHS Markit, which compiles the survey:
“October saw a worrying turnaround in the performance of the UK manufacturing sector. At current levels, the survey indicates that factory output could contract in the fourth quarter, dropping by 0.2%. New orders and employment both fell for the first time since the Brexit vote as domestic and overseas demand were hit by a combination of Brexit uncertainties, rising global trade tensions and especially weak demand for autos.
“Alongside the halt in hiring, the increasingly defensive position of UK manufacturers was also reflected in the slight decreases in purchasing activity and inventory holdings, which firms linked to protecting cash flow and cost-cutting. There was some better news on the prices front, however, with input cost inflation dipping to its lowest for over two years as many global commodity prices fell.
“Looking ahead, manufacturers still maintain a positive outlook for production over the coming year, with 48% forecasting expansion. That said, the second half of the year so far has also seen confidence remain low compared to its long-run average, with views on prospects darkening again in October amid rising Brexit-related uncertainties and escalating global trade tensions.”
