Uk September Pmi Jumps Higher

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Uk September Pmi Jumps Higher

UK's September PMI Jumps To 44.3, Shows Slump In Factory Activity

Another month and yet another contraction in the UK's manufacturing activity. The degree of contraction was not as steep as in August, but it is still below the 50 mark. According to experts, August's reading showed one of the fastest drops in the last 3 years.

The UK's PMI released by S&P Global shows that September's reading was 44.3, which is only a little higher than the 43.0 in August. If we look back, the low reading of August was only last seen in May of 2020.

Earlier, the market was forecasting a reading of 44.2, but the actual PMI reading in the UK turned out to be 44.3 (only a little higher).

Q3 2023: Manufacturing Decline Continues

The end of the Q3 in the UK shows that the decline in manufacturing activities continues without any break. From employment to new orders to output, everything is down. At the same time, new work coming from overseas and domestic clients also remains weak.

As per the latest data, the manufacturing activity of the UK during July showed a decline of 0.8%. However, the volume was at least 3.0% more than the last year.

According to S&P Global, 55% of the firms from the manufacturing sector are expected to grow during the upcoming 12 months. On the contrary, 9% of manufacturers believe the contraction will continue.

The reason behind the broad optimism among the manufacturers is linked to a stellar market recovery, stable inflation, and the growth plans by the government.

One of the biggest reasons behind a weak PMI reading was weak overseas demand, especially those from the USA, EUROPE, China, etc. So, in a sense, we can say that the UK manufacturing activity is suffering from a weak global demand.

For the rest of the year, the policy measures by the Bank of England will play a key role in the manufacturing sector of the UK. Any policy measure by the central bank will affect the factory prices, inflation, and the profit margins of the companies.

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