"A slowing global economy and strong sterling-euro exchange rate are hurting the competitiveness of exporters"
- Rob Dobson, a senior economist at Markit
Activity growth in the UK factories unexpectedly slowed in April, as the strong Sterling undermined demand for British goods overseas. The UK manufacturing PMI declined to 51.9, down from 54.0 in the preceding month, intensifying fears about the weakness of economic recovery in the country. New export orders fell for the fifth time in seven months, as the Pound has gained 7% this year versus the Euro, the currency of the UK's top trading partner. The index of new orders slid to 52.9, the lowest level since September. The UK manufacturing PMI is one of the last economic reports before the May 7 general election, where voter opinion polls show neither main party will gain an outright majority. Besides, the survey of activity will sap hopes that the UK economy will fare better in the second quarter. The nation's economy expanded just 0.3% in the first quarter, the slowest pace since 2012, as industrial production and construction both contracted.
Total industrial production in the UK fell below market expectations in February, due to a sharp decrease in mining and quarrying, while oil and gas extraction experienced the biggest year-on-year fall in 18 months. However, manufacturing performed steadily, increasing 0.4% between January and February, with rises in seven of the 13 manufacturing sub-sectors.
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