Financial News: UK Manufacturing PMI At 1-Year High

UK Manufacturing PMI At 1-Year High

(RTTNews) - The UK manufacturing activity shrank in October but the pace of contraction was the slowest in a year, the final purchasing managers' survey data from S&P Global revealed on Monday.

The factory Purchasing Managers' Index rose to a 12-month high of 49.7 in October from 46.2 in September. The flash reading was 49.6. Demand from both domestic and overseas markets decreased in October. Total new business shrank for the thirteenth straight month. New export orders dropped for the forty-fifth straight month as ongoing tariff uncertainties and competitiveness issues led to reduced overseas demand.

Business optimism improved to an eight-month high in October. Positive sentiment was linked to economic recovery, efforts to regain market share, promotional activity and new product launches.

Employment shrank for the twelfth straight month as the impact of subdued demand and earlier labor cost increases continued to drive job losses. That said, the pace of job loss eased to its weakest in the current sequence of decline.

Average input costs increased at the slowest pace so far this year and average selling prices increased in October.

Although the October PMI showed manufacturing production rising for the first time in a year, there are real concerns that the bounce could prove short-lived, S&P Global Market Intelligence Rob Dobson said.

"There are also concerns the forthcoming Budget will exacerbate the lingering challenges created by last year's Budget, especially in relation the impact of NMW and employer NICs on costs, demand and production," said Dobson.

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