DISMAL trading for British manufacturers kept the sector’s purchasing managers’ index (PMI) firmly in negative territory in October, with the gloomy conditions reflected across the world.
Just a week after the UK economy was shown to have grown one per cent in the quarter to the end of September, Markit and CIPS’ PMI reading for UK manufacturing fell to a worse-than-expected 47.5 for October.
This was down from a downwardly revised 48.1 in September and well below the 50 mark between growth and contraction.
Total new orders fell for the seventh month running, with signs of slowing demand from Asian buyers in yesterday’s report.
“This is a dismal start to the fourth quarter, reflecting underlying weakness in the manufacturing sector,” said Nida Ali from the Ernst & Young Item Club.
“While demand from the Eurozone was expected to be disappointing, reduced demand from Asia amid a general global economic slowdown is particularly discouraging.”
China’s manufacturing PMI also remains below the no-change level at 49.5, Markit and HSBC said yesterday, but the picture has improved slightly since September and the figure is at an eight-month high.
“The small rise in China’s latest PMI offers a glimmer of hope as it suggests that factory output is accelerating again, which may mean better economic performance for Asia in coming months, and may link through to an increase in UK exports to Asia,” said Stephen Cooper, UK head of manufacturing at KPMG.
Greece’s PMI for the month slumped to 41, boding ill for the Eurozone-wide figures due today. Ireland, however, bounded to further expansion with a reading of 52.1.