The UK Manufacturing PMI worse than expected at 41 month low, The UK PMI manufacturing index shows the Brexit impact on UK economy.
UK PMI Manufacturing
The final July UK PMI manufacturing reading was revised lower to 48.2 from the flash reading of 49.1 and below market expectations of 49.1. The index fell to the lowest level since February 2013, while the deterioration from the flash reading will increase concerns surrounding the near-term outlook.
There was a decline in manufacturing output and new orders for the first time since early 2013 with production falling at the fastest pace since October 2012. There were declines across all sectors with the intermediate sector worst hit in terms of output and orders.
Export orders rose for the second successive month and by the largest amount for close to two years as competitiveness improved. Exports for investment and intermediate goods was offset by a decline in consumer goods, while the rate of increase in export orders was also slower than reported in the flash data.
There was a sharp increase in manufacturers input prices at the fastest pace for five years as import prices rose due to the fall in Sterling with the probability of further increases over the next few months. Although the pace of increase in selling prices was the highest in almost two years, there will be a further squeeze on margins.
Manufacturers continued to cut employment for the seventh consecutive month, while the rate of decline was the second sharpest in 40 months.
The data overall will increase near-term concerns surrounding the outlook, especially in view of the downward revision from the flash reading and the services data will be watched closely on Wednesday. The data will also reinforce expectations of aggressive Bank of England monetary easing this week.
Sterling lost ground following the data with GBP/USD testing support near 1.3200 as EUR/GBP hit 0.8450, Gilts were little changed an in positive territory for the day, while the FTSE index held small gains on the day. Visit ForexSQ forex trading news blog in daily base for more financial daily news.