October 2, 2014
The Guardian reported that the continued slow in growth may have been due to “uncertainty over the Scottish referendum, a flagging Eurozone economy, and slowing domestic demand”, with the PMI dropping from 52.2 in August to 51.6 in September – the lowest level since April last year; although anything over 50 still indicates expansion.
The result was the third monthly drop in the PMI index, which is based on output, orders, employment and prices; with the manufacturing sector indicating strong growth last year and up to the beginning of 2014, with April seeing a five-month high of 57.3.
During September, The Guardian reported, “new export orders barely grew”, while manufacturing in the Eurozone hit a 14-month low, with Germany and France – the region’s two biggest markets – lowering the overall PMI index to 50.3.
James Knightley, Economist at ING, said: “This is a 17-month low and further diminishes the prospect of Bank of England policy tightening in November. One possibility is that the uncertainty generated by the close polls in the lead-up to the Scottish independence referendum made businesses cautious and therefore led to a delay in orders.”
Meanwhile Rob Dobson, Senior Economist at Markit, said: “The strong upsurge in the UK manufacturing sector at the start of the year appears to have run its course. Inflows of new work slowed in both domestic and export markets. Overseas demand was reined in mainly by the ongoing lethargy of the eurozone and the appreciation of sterling against the euro.”
Categories : City News