United Kingdom builders pick up pace in October, but Brexit worries grow - PMI

Adjust Comment Print

The October manufacturing Purchasing Manager's Index (PMI) survey from IHS/Market came in below expectations with a fall of 2.5 points, one of the steepest falls seen in the index over the past five years.

Low stocks and longer delivery times among suppliers encouraged raw materials inventory building across the manufacturing sector during October. That said, the overall level of positive sentiment fell in October and was below the series average.

But the rate of payroll reduction in the manufacturing sector slowed from September, according to the Caixin survey, which focuses more on small and medium-sized companies which are vital to China's job creation.

"Optimism was at its lowest level for six years, as the sector remained stifled by client hesitation, fears about the health of the United Kingdom economy and continued Brexit uncertainty, resulting in slower growth of new orders and purchasing". Not only did employment expand for the thirty-first month running, but it also showed the strongest growth since July.

EEF economist Francesco Arcangeli commented: "It appears that reality abruptly kicked in October with today's manufacturing PMI illustrating that manufacturing activity slowed sharply, ahead of the Bank of England's MPC decision later today". The subindex measuring production and operations prospects was 56.4, unchanged from the previous month.

The consumer goods sector was the hardest hit, while investment and intermediate goods both grew a little.

Dele Alli: Mauricio Pochettino key to signing new Tottenham contract
Harry Kane and Davinson Sanchez agreed new six-year contracts in the summer, while Pochettino, Son Heung-Min, Harry Winks and Erik Lamela have also signed long-term deals.

Sadio Mane goal wrongly ruled out for Liverpool at Arsenal
Alexandre Lacazette struck a late equaliser as Arsenal and Liverpool shared the spoils in an entertaining Premier League clash. Arsenal has some good players, and you saw against Leicester City the other week what can happen when they get on a roll.

Ridley Scott moving ahead with Gladiator sequel
He's also penned the upcoming Top Gun: Maverick and a planned Logan's Run remake, so he certainly has some good credentials. Although Maximus died from the wounds he sustained during the battle, the warrior left a strong impression on young Lucius.

ISM reported that 13 of the 18 manufacturing sectors reported growth in August, including: Textile Mills; Electrical Equipment, Appliances & Components; Apparel, Leather & Allied Products; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Furniture & Related Products; Miscellaneous Manufacturing; Machinery; Transportation Equipment; Printing & Related Support Activities; Chemical Products; and Paper Products. Many analysts have attributed the increase largely to front-loading of shipments done by firms to dodge stiffer USA duties.

Taiwanese companies generally reported slack demand from customers at home and overseas, and were negative about the rest of the year amid concern that the US-China trade dispute would affect their performance, Fiddes said, adding that output levels are unlikely to improve in the near term as purchasing activity slows.

The weakness in total new orders was mainly centred on the consumer goods sector.

For further information on the PMI survey methodology, please contact economics@ihsmarkit.com. Production and business confidence continued to cool despite stable demand. The region accounts for around 60 percent of global growth.

The intellectual property rights to the data provided herein are owned by or licensed to IHS Markit. IHS Markit shall not have any liability, duty or obligation for or relating to the content or information ("data") contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon.