UK PMI’s In March Recover From February Lows

Business activity across manufacturing, construction, and services sector in the UK fared seemingly better in March, compared to the previous month. The forward-looking Purchase Managers Index survey showed that businesses regained some momentum across the board.

But the pace of recovery wasn’t strong enough, suggesting that downside risks still exist. Construction growth was seen slowing in March and follows a similar result from the manufacturing sector as well.

The headline Markit/CIPS construction PMI in the UK fell to 52.2 in March, 0.3 points lower from February’s 52.5, which brought the first quarter average down to 52.3, compared to the fourth quarter of 2016.

Manufacturing PMI Falling

The manufacturing PMI was also soft, suggesting that activity could slow even further in the coming months. Despite the bleak outlook, the data showed that price pressures remained elevated suggesting that inflationary pressures at the factory gate continued.

The manufacturing PMI in the UK fell for the third consecutive month, posting a reading of 54.2 in March which marked a four-month low. The manufacturing sector’s output index showed even steeper declines indicating that further weakness can be expected. Still, offering a glimmer of hope was the fact that the output index was recorded at 50, indicating a flat pace of expansion.

A reading below 50 in the coming months could signal contraction in the sector.

Based on the latest data, the manufacturing sector in the UK is expected to contribute less to the economic growth for the nation, which is tipped to see a slower pace of gross domestic product during the first quarter of 2017.