UK Preview: UK’s Markit manufacturing PMI to decline in January

FXStreet (Mumbai) - UK’s Markit manufacturing PMI will be released today at 9.30 GMT. Markets broadly expect manufacturing PMI to drop to 51.8 to 51.9. UK Manufacturing PMI came in at 51.9 in December, down from 52.7 in November. New orders was found to have slipped at a pace that was the slowest in five months.The surveys in the recent past has showed that factory activities are being impacted by stronger pound and volatile markets as they were weakening exports.

UK’s manufacturers have been hit hard by the weak global economic outlook. Strong pound has further worsened the case for manufacturers and exporters. the British Chambers of Commerce flagged the concern that “the UK economy could suffer negative consequences in the face of increasing global uncertainty”. Analysts have also warned that manufacturing exports will continue to be hit in 2016 increasing the economy’s reliance on consumer spending to drive growth.

A survey of 7,500 firms conducted by the British Chambers of Commerce showed that performance of the manufacturing sector was worse than the services sector and was “close to stagnation”. Domestic and export sales have been noted to have fallen below their pre-recession levels in 2007.

The BCC has stressed that government’s initiative will be required to boost manufacturing activity. It highlighted the need to upgrade workers’ skills and upgrade outdated infrastructure. It has also highlighted the need to enable small firms access to cheap credit which is available to more established and bigger businesses.