August PMI data from the U.K. held up better than expected. Perhaps the nation will not slip into the recession that has gripped most of Europe. The government has been pressured to lessen austerity packages put into place early last year and take up some measure of stimulus. The new data may support those who want little change, as the economy may be “healing itself”
The Markit/CIPS UK Manufacturing PMI showed that “Downturn in UK manufacturing sector eases sharply in August”
Nevertheless, the numbers show that whatever stability may exists is tentative
The report detailed:
The downturn in the UK manufacturing sector showed signs of easing during August, following a
severe contraction in the previous month. The seasonally adjusted Markit/CIPS Purchasing Manager’s Index (PMI) rose to 49.5, from 45.2 in July, a four-month high and only slightly below the 50.0 mark that separates expansion from contraction. Manufacturing production fell for the second successive month in August, albeit to a much lesser degree than in July. The decline in output was centred on the investment goods sector. Output rose solidly at consumer goods producers, while intermediate goods companies saw a marginal return to growth.
Douglas A. McIntyre
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