Sharp decline in the manufacturing PMI is a genuine cause for concern - ITEM Club
Nida Ali, economic advisor to the EY ITEM Club, comments on today's PMI manufacturing figures:
- The sharp decline in the manufacturing PMI is a genuine cause for concern
- The details of the survey clearly point to underlying weakness in the manufacturing sector
- These results don’t bode well for the wider economy and barely any growth is expected in Q4
“The sharp decline in the manufacturing PMI is a genuine cause for concern. What is particularly worrying is the decline in new orders, especially from abroad. Clearly the knock-on effects of the recent turmoil in financial markets are starting to be felt on the UK economy, and these trends are likely to continue in the coming months. With the recovery heavily dependent on exports to power the recovery, this doesn’t bode well for growth in the months ahead.
“We await the release for PMI services later this week, although even if the results remain upbeat, we barely expect any growth in Q4. Overall, we expect the economy to expand by about 0.9% in 2011 and 1.5% in 2012.