Monday, 01 June, 2015

U.K. Domestic Demand Drives Factory Pickup as Exports Stall

(Bloomberg) — U.K. manufacturing expanded less than economists forecast in May as producers struggled to attract demand from foreign markets. A factory Purchasing Managers’ Index rose to 52 from a revised 51.8 in April, Markit Economics said Monday. Economists had forecast an increase to 52.5 from a previous reading of 51.9. A reading above 50 indicates expansion. The report highlights Britain’s reliance on domestic demand while an economic recovery has yet to gain momentum in Europe, its biggest trading partner. Data last week showed exports dragged down activity in the first quarter, with net trade knocking 0.9 percentage point from gross domestic product growth. The overall economy expanded 0.3 percent in the period, the weakest since 2012. “Expectations of a broad rebound in U.K. economic growth during the second quarter of the year are called into question by these readings,” said Rob Dobson, senior economist at Markit. “Manufacturing looks on course to act as a minor drag on the economy, as the sector is hit by the combination of the strong pound and weak business investment spending.” Domestic demand also fuelled a pickup in new orders, as orders for export were little changed in May following a drop the previous month, Markit said. Consumer goods recorded “by far” the biggest gain in output and new orders. Manufacturers raised average selling prices for the first time in five months, while input costs fell. A measure of employment showed the weakest pace of growth in more than two years. Archr LLP is Authorised and regulated by the Financial Conduct Authority (FCA reference 617163). Archr LLP is not covered by the Financial Services Compensation Scheme (FSCS). Archr is registered in England and Wales No. OC371018. Registered office Chancery House, 30 St Johns Road, Woking, Surrey, GU21 7SA This message may contain confidential or privileged information. If you are not the intended recipient, please advise us immediately and delete this message. The unauthorised use, disclosure, distribution and/or copying of this e-mail or any information it contains is prohibited. This information is not, and should not be construed as, a recommendation, solicitation or offer to buy or sell any securities or related financial products. This information does not constitute investment advice, does not constitute a personal recommendation and has been prepared without regard to the individual financial circumstances, needs or objectives of persons who receive it. You are receiving this email because you are a valued client of Archr.