UK manufacturing PMI rises to 55.1 in March, a positive surprise

The manufacturing sector activity in the UK economy improved in the month of March, surprising markets to the upside, the latest data from Markit revealed on Tuesday.

The manufacturing Purchasing Managers' Index (PMI) in the UK arrived at 55.1 points in March, as compared to a previous 55.0 (revised lower from 55.2) reading. Markets had predicted the PMI to tick lower to 54.7.

Key Points:    

Output growth picks up, but upturn in new orders slows.

Input cost and output price inflation both slow.

Rob Dobson of Markit commented in the release, “The latest PMI survey provided further evidence that UK manufacturing has entered a softer growth phase so far this year. Although the pace of output expansion ticked higher in March, which is especially encouraging given the heavy snowfall during the month, this was offset by slower increases in new orders and employment. Average rates of increase over the opening quarter as a whole are also down noticeably from the growth spurt seen at the end of 2017. Compared to official data, the performance through quarter one is consistent with only a 0.4-0.5% gain in production volumes, a considerable slide from the fourth quarter’s 1.3% increase. The key question is whether growth can now be sustained, albeit at a lower level, into the coming months.”