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Free AccessU.S. Macro Signal - Sept 2024: Rebalancing Act Spurs Fed Cuts
U.S. Macro Signal - Sept 2024: Rebalancing Act Spurs Fed Cuts
MNI: UK July Manufacturing Output Hits 3-Month Low: IHS Markit
--UK June Manufacturing PMI 54.0 Vs Revised 54.3 in June
LONDON (MNI) - UK manufacturing sector activity was lower in July, the
latest IHS Markit/CIPS Purchasing Managers' Index (PMI) showed.
The headline manufacturing PMI slipped 0.3 points to 54.0 in July from
June's downwardly revised 54.3 (54.4 prev). This meant June was in line with
May's read, which was also revised by the same amount.
After May's bounce from April's 17-month low and June steady as she goes
reading, July's modest move lower illustrates continued softness in
manufacturing growth since the turn of the year, with intermediate goods
production falling for the first time in two years.
According to IHS Markit, July saw the weakest expansion in UK manufacturing
output in 16 months, with both output and new orders exhibiting slower rates of
expansion. Putting this together meant domestic sources were the main reason for
the slowdown of new business growth which undermined new export work increasing
at the fastest pace for six months.
--EXPORT STRENGTH
The strength of new export work was reported by companies to be stemming
from improved demand from mainland Europe, the USA, China and the Middle-East.
The momentum was cited by some firms as being accommodated by promotional
activity and new product launches.
Sectoral data shows that intermediate goods production dampened an
otherwise relatively neutral picture. Investment goods producers and the
consumer goods industry saw solid growth in both output and new work (albeit
lower than June). Intermediate goods however contracted for the first time in
two years, with the rate of expansion in new business slowing sharply to
near-stagnation.
However, hiring intentions appeared to show some positive signals.
Employment rose for the 24th month in a row, with job creation sustained across
all sectors. Manufacturers linked staffing levels to planned company expansions,
higher output and efforts to reduce backlogs of work.
--INPUTS COSTS ELEVATED
Input cost inflation remained high in July, after accelerating to a
four-month high in June. The pressure stemmed from rising commodity prices and
shortages of certain raw materials driving up costs. The cost pressures were
such that firms passed part of the increase on to clients resulting in the
steepest rise in selling prices since February.
"UK manufacturing started the third quarter on a softer footing, with rates
of expansion in output and new orders losing steam. The upturn in the sector has
eased noticeably since the back-end of 2017, meaning that manufacturing has
failed to provide any meaningful boost to headline GDP growth through the
year-so-far," Rob Dobson, Director at IHS Markit, said.
Duncan Brock, Group Director at the Chartered Institute of Procurement and
Supply added: "The general manufacturing malaise was compounded by a scarcity of
essential raw materials and vendor delivery times lengthened at a pace not seen
for ten months... Should operating conditions remain unchanged, this damp squib
of a performance may persist and the UK has to look to other sectors to inject
some vitality into its economic performance."
--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
[TOPICS: MABDS$,M$B$$$,M$E$$$,MT$$$$]
To read the full story
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Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.