October 2018 UK Markit/CIPS manufacturing PMI 1 November 2018

  • Prior 53.8
  • Lowest since Jul 2016
  • Input prices slowest rise in over 2 years
  • New orders and employment fall for the first time since 2016

Cable had dipped after the the Brexit ministry headlines but I wondered if someone had a sniff of the PMI data. The fact we hit 1.2881 befor it, and have now gone up after it suggests that to be the case.

“October saw a worrying turnaround in the performance of the UK manufacturing sector. At current levels, the survey indicates that factory output could contract in the fourth quarter, dropping by 0.2%. New orders and employment both fell for the first time since the Brexit vote as domestic and overseas demand were hit by a combination of Brexit uncertainties, rising global trade tensions and especially weak demand for autos.

Alongside the halt in hiring, the increasingly defensive position of UK manufacturers was also reflected in the slight decreases in purchasing activity and inventory holdings, which firms linked to protecting cash flow and cost-cutting. There was some better news on the prices front, however, with input cost inflation dipping to its lowest for over two years as many global commodity prices fell.

Looking ahead, manufacturers still maintain a positive outlook for production over the coming year, with 48% forecasting expansion. That said, the second half of the year so far has also seen confidence remain low compared to its long-run average, with views on prospects darkening again in October amid rising Brexit-related uncertainties and escalating global trade tensions.” Said Rob Dobson at Markit

Ryan Littlestone

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