LONDON (Reuters) – British factories stored up a gradual tempo of progress in June however worries about global commerce and Brexit knocked confidence in regards to the outlook to a seven-month low, a survey confirmed on Monday.
The IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) inched as much as 54.four from a downwardly revised 54.three in May, beating the consensus of 54.zero in a Reuters ballot of economists and above the 50 mark that separates progress from contraction.
Still, June capped the weakest quarter for the British manufacturing PMI in a single and a half years, and survey compiler IHS Markit mentioned prospects for the sector, which accounts for a tenth of financial output, seemed uncertain.
Optimism fell to its lowest degree this yr as manufacturing unit bosses fretted about price pressures, doable future commerce tariffs, the alternate fee, and Britain’s departure from the European Union – now solely 9 months away.
The figures chimed with a Lloyds Bank survey final week that additionally confirmed business confidence ebbed to its lowest degree this yr.
Data final week confirmed the financial system’s slowdown in early 2018 was much less extreme than first estimated, however business and client surveys have painted a combined image of the second quarter.
Bank of England officers weighing up the subsequent rise in rates of interest have been eager to emphasize the extra constructive numbers.
“The turnaround in (manufacturing) performance since the start of the year has been remarkable, with impressive growth rates late last year turning into some of the weakest rates of expansion seen over the past two years,” Rob Dobson, director at IHS Markit, mentioned in regards to the PMI.
Manufacturers had turn into more and more reliant on work backlogs and increase stock to take care of output, Dobson mentioned.
“This is a position that cannot be sustained far beyond the immediate horizon,” he mentioned.
“With industry potentially stuck in the doldrums, the UK economy will need to look to other sectors if GDP growth is to match expectations in the latter half of the year.”
Reporting by Andy Bruce; enhancing by John Stonestreet