UK manufacturing PMI surprises negatively in November

The manufacturing sector activity in the UK economy surprised markets to the downside and extended the drop in the month of November, although remained in expansion territory, well above its long-run average of 51, according to the latest data from Markit.

The final Purchasing Managers' Index (PMI) in the UK dropped to 53.4 points in Nov, as compared to a previously revised 54.2 reading. Markets had predicted a dip to 54.5.

Key Points:

Weak exchange rate drives up input costs

Growth of production and new orders lose impetus, but remain above long-run trends

Upturn in the UK manufacturing sector extended into its fourth month running during November

Rob Dobson of Markit commented in the release, “The latest PMI indicates that the UK manufacturing sector remained in good health during November. Although the recent growth spurt showed further signs of slowing, the pace of expansion is still solid and above its long-term trend. This should be sufficient to ensure manufacturing is a positive contributor to fourth quarter GDP.”