Friday, June 3, 2011

Manufacturing growth hits 20-month low

Source: Press TV

Britain's manufacturing sector has registered its poorest performance in almost two years in May fueling worries that the economic growth would plateau in the coming months.

The Markit/CIPS UK manufacturing purchasing managers' index (PMI) dropped to 52.1 last month from 54.4 in April recording its worst figure since September 2009. Readings above 50 suggest the economy is growing though moderately in May.

"The UK PMI suggests that manufacturing has moved from rapid expansion to near stagnation," said Rob Dobson, senior economist at Markit.

The slowing trend comes despite the manufacturing sector being one of the best performing since the recession.

"Domestic market weakness was the main drag on order books and output," Dobson added, pointing to the bank holidays for the royal wedding as a possible deteriorating factor for production.

The new figures has led to warnings by analysts who said the Treasury hopes of stronger performance in the second quarter may be too optimistic.

"We're looking at an economy that doesn't appear to be generating a huge amount of momentum, and on the back of the weakness of the first quarter, that's not a good place to be," said Peter Dixon, the chief UK economist at German bankinig giant Commerzbank.

A second purchasing managers' index is expected to be announced on Friday from the services sector, which makes up almost 70 percent of the British economy.

No comments:

Post a Comment

Thanks for commenting on this post. Please consider sharing it on Facebook or Twitter for a wider discussion.

World United Music Podcast

World United Music Podcast
Click on Image for Direct Link