U.K. manufacturing PMI falls again in August, index falls to 25-month low

U.K. manufacturing PMI index fell for the third straight month in August. The IHS Markit Manufacturing PMI index fell to 52.8 in August from a downwardly revised 53.8 in July. The outturn was below consensus expectations of a widely unchanged reading and took the headline index to a 25-month low. Delving into details, the largest drag on manufacturing confidence was because of a noticeable fall in the flow of new orders with new export business falling for the first time in 28 months. Companies also scaled back the rate of hiring over the month.

Some companies have attributed lower inflows of export orders of a softer rate of growth in the global economy. Nevertheless, export orders indicated more signs of holding up in a number of other European nations. Furthermore, the quarterly survey from the EEF manufacturer organization, showed a more positive picture of health and thus implies that the softness in today’s PMI survey might prove fleeting, noted Lloyds Bank in a research report.

Sentiment of companies regarding future output stayed relatively buoyant. More than 47 percent of firms surveyed anticipated output to be higher in 12-months’ time, while just 8 percent anticipated a contraction. In spite of today’s figure, as the manufacturing sector accounts for about 10 percent of U.K. economic activity, the U.K.’s growth outlook would still be mainly driven by the dominant services sector. The upcoming services PMI figure is expected to have recovered modestly, said Lloyds Bank.

At 11:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral at 3.45105, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 8.32673. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex