UK manufacturing PMI beats expectations

The Markit/CIPS UK manufacturing purchasing managers’ index came in a little better than expected for May.

The index pushed up to 50.1 from 49.4 in April, back above the 50 mark that separates contraction from expansion and ahead of economists’ expectations of a reading of 49.6.

Production volumes were broadly unchanged in the latest survey month, as the growth rate of new order inflows remained subdued, albeit slightly quicker than in April.

Rob Dobson, senior economist at Markit, said: “The manufacturing sector continued its lacklustre start to 2016. Although key indicators for output, new orders and the headline PMI all ticked higher in May, the latest survey is still consistent with around a 0.8% quarterly decline in the official ONS Manufacturing Production Index.

“The sector will therefore remain a drag on broader economic growth, adding pressure on the service sector to sustain the upturn in GDP.

David Morrison, senior market strategist at SpreadCo, said: “The UK’s manufacturing PMI has been trending downwards since the end of 2013. While this has been a shallow decline, it has been steady and relentless, only broken by an unexpected spike in November last year.

“So this latest release goes against the grain and is an unexpected piece of good news against the uncertainty ahead of the UK referendum on EU membership.”