Stephen Cooper, KPMG’s UK head of manufacturing, comments on the Markit/CIPS Manufacturing Purchasing Managers' Index (PMI), which fell for the second successive month to 47.5 in October:
“The UK PMI figures are not good news, but not unexpected. The Eurozone, which is still the UK’s biggest export market, has major issues to resolve which will make Eurozone buyers cautious.
“Looking globally, the US manufacturing sector has shown recent modest expansion, but the US economy still has significant fiscal issues which need to be resolved. Next week’s election result will impact on how this is done in coming months.
“In Asia, weaker orders are not unexpected given a number of recent corporate earnings warnings from UK manufacturers. On the other hand, the small rise in China’s latest PMI offers a glimmer of hope as it suggests that factory output is accelerating again, which may mean better economic performance for Asia in coming months, and may link through to an increase in UK exports to Asia.
“The manufacturing sector is contending with challenging domestic and global factors at an uncertain and fragile time for the UK economy. However, while conditions remain tough in the UK, overall there are some global shifts in the right direction.”
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