Economic and political turmoil: United Kingdom manufacturing hits seven-year low

Economic and political turmoil: United Kingdom manufacturing hits seven-year low

"The global economic slowdown was the main factor weighing on new work received from Europe, the US and Asia".

Among the 21 industries surveyed, 17 were in the expansion zone, up from 12 in July, and 11 recorded month-on-month PMI increases.

While an improvement on July, that month's reading was the euro zone's lowest since December 2012. Anything above 50.0 separates economic growth from contraction.

And added: "This has impacted hiring plans, with manufacturers maintaining staffing levels ahead of expected rises in production requirements in coming months". The county's official index, which tracks more than 3,000 larger manufacturers, still reported a contraction. Manufacturing accounts for 10% of British economic output. The slight bump in August was seen as a clear sign of recovery, mainly fueled by enhanced production activity.

The PMI for the non-manufacturing sector hit 53.8 in August, up from 53.7 in July.

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The economy has managed to weather the uncertainty created by the June 2016 vote by Britain, its near neighbour and close trading partner, to leave the European Union, although data last week showed some moderation in the rapid pace of jobs growth.

Export-reliant South Korea, Japan and Taiwan also saw factory activity shrink, underscoring the growing pain from the tit-for-tat tariff war between the world's two largest economies. "Challenging demand conditions persisted in August, with intense competitive pressures, reduced workloads from clients in other key export markets and global trade war worries reported as drags on sales", IHS Markit said.

British manufacturing purchasing managers' index (PMI) plunged to 47.4 in August, hitting a seven-year low due to the headwinds of Brexit uncertainty and a global economic slowdown. This indicator has been below the level of 50 for four months in a row now.

The survey comes after official figures showed India's economy grew at an annual rate of 5 per cent last quarter, its slowest in more than six years and significantly weaker than 5.7 per cent in a Reuters poll.

Subdued domestic demand, weak output and increased cost pressures weighed on business momentum. But the likelihood of a notable drop in PMI readings is limited, as consumption resilience, infrastructure investment recovery and policy support will shield the economy from any major downturn, Hua said.

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