- Rob Dobson, senior economist at Markit
UK manufacturing activity rebounded in May after sliding to the lowest level in seven months in April, but strong domestic demand was largely offset by sluggish exports. According to Markit, British manufacturing PMI climbed to 52.0 in May up from 51.8 a month earlier. Economists, however, had forecast an increase to 52.5. Manufacturing accounts for about 10% of the UK economy. Hiring was the slowest in more than two years, suggesting the boom in job creation that Britain has enjoyed since mid-2013 may be starting to wane. British factory output rose just 0.1% in the first three months of 2015, and an industry body cut its growth forecast for 2015 as a whole, citing knock-on effects from weakness in the oil and gas sector. The report also underscored Britain's reliance on domestic consumption while an economic recovery has yet to regain momentum in Europe, the UK top trading partner. Data last week showed exports derailed activity in the first quarter, with net trade slashed 0.9 percentage point from the overall economic output. The UK economy grew 0.3% in the period, the weakest since 2012.
The downbeat news on manufacturing contrasts with more upbeat reports on other sectors of the economy. The Confederation of British Industry said the private sector as a whole was enjoying its fastest growth for a year.
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