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

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

Latest posts by Kenny Fisher (see all)