UK Manufacturing Sector Growth Slows Down

The UK factory index fell more than economists forecast in April. The Markit/CIPS purchasing managers’ index (PMI) dropped to 50.5 in April, down from 51.9 in March. The decline in the UK’s PMI left it at its weakest level this year, and was led by the sharpest decline in export orders since May 2009.

Any PMI above 50 indicates growth in the sector. April’s PMI figure represents the fifth consecutive month of growth, with the manufacturing sector contributing to about 11 percent of the UK economy.

While the modest growth in the sector is positive news for the economy, the concerns with the slowdown are rising, accompanied by the euro zone crisis pressurising exports. Furthermore, declining orders from the US and Asia could be even more worrying as a risk to continued growth.

Declining manufacturing sector growth is one of the first signs of the UK economy’s state in the second quarter of 2012, following the news that the GDP has contracted 0.2 percent in the first quarter, and the country has entered its first double-dip recession since the 1970s.

Source: BBC

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.