- Markit
The UK manufacturing sector encountered a surprise contraction in April that reflected in the PMI, as it entered negative territory for the first time in 4 years, plummeting under the 50 point mark to show 49.2 points. The indicator missed the initial investor forecast of 51.2 and fuelled concerns by showing a drop in comparison to March. Worries about industry health were amplified by the Markit Economics claim that output in the manufacturing sector is shrinking in a scale of 1% per quarter, and around 20 000 jobs have already been lost in the last three months. Uncertainty over the outcome of the EU referendum can spawn further effects on Britain's currency and economy. While recent polls have indicated a positive trend in regard to remaining part of the EU, both global and domestic organizations warn that a vote in favour of Brexit can potentially prompt an economic downturn and imbalances. A combination of uncertainty generating factors both domestically and globally are likely to contribute to a slowdown for the industry in the second quarter.
The UK economy has been experiencing a slowdown as first-quarter data showed economic growth of just 0.4%, with the service, industrial and manufacturing sectors correspondingly displaying signs of weakness. The same trend applied for exports as market conditions weakened.
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