British leading economic data saw the steepest drop since February 2013, as the country’s economy cooled off before the general election.
British manufacturing purchasing managers’ index (PMI), a gauge of the industry activities, dropped to 51.9 in April 2015 from the revised 54.0 in March 2015, said Markit Economics Limited Friday.
The data was substantially below the market estimates consensus, though it has stayed above the neutral 50.0 mark in each month since April 2013. A figure above 50 suggests that the sector is growing.
The slowdown in the rate of increase of output occurred in tandem with weaker growth of incoming new business, in turn led by a decrease in the volume of new work received from abroad, said Markit, the London-based survey compiler.
Companies reported that the domestic market continued to exhibit a degree of strength, leading to growth of total new orders, and growth of output and new orders was largely centered on the consumer goods sector during April, said Markit.
Manufacturing employment increased for the 24th successive month in April, with modest job creation signaled in both the consumer and investment goods sectors. Price pressures, however, remained on the downside over the same period, with both inputs costs and output charges slipping, it also said.
Rob Dobson, senior economist at Markit, said:” Coming on the back of weaker-than-expected GDP numbers on Tuesday and only six days before the General Election, today’s UK PMI delivered less than positive news on the health of the manufacturing sector.”
“Growth remains largely consumer-led, with the strong performance of the consumer goods sector in stark contrast with other sectors,” he added.
British gross domestic product (GDP) was estimated to have increased by 0.3 percent in the first quarter of 2015 compared with growth of 0.6 percent the fourth quarter of 2014, recording the slowest quarterly growth for two years, announced the Office for National Statistics (ONS) on Tuesday.
Samuel Tombs, senior UK economist at Capital Economics, commented that the figures highlight the increasing dependence of the UK’s economic recovery on consumers.
“And with overseas demand still weak, manufacturers are been compelled to offer deep discounts merely to stand still,” he said.
Martin Beck, senior economic adviser to the EY ITEM Club, said that the data reflects the long-observed divergence between the reasonably robust domestic market and weakness overseas has persisted. Enditem