In March, UK’s manufacturing PMI rose to 51, as compared with February’s 50.8 and slightly lower than consensus expectation of 51.2. The manufacturing PMI averaged 51.6 in Q1, the lowest quarterly print since Q1 2013. Even though other sentiment indicators and recent weakening in the sterling effective exchange rate imply that activity will likely strengthen in coming months, any rebound is expected to be moderate, according to Llyods Bank.
Today’s PMI report and yesterday’s Index of Services release for January suggest that UK’s services sector will carry on leading activity, added Llyods Bank. In this context, the sharp fall in services PMI to 52.7 in February increased worries regarding the negative impact of anxieties about the outlook of global growth. But partial retracing of the Lloyds Business Barometer for March, after a sharp decline in February indicates towards a similar rebound in services PMI that will be released next Tuesday, says Lloyds Bank.
“Such an outcome would support our forecast that Q1 growth will ease slightly to 0.5% q/q after Q4’s upwardly revised 0.6% print”, notes Llyod Bank.
