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United Kingdom manufacturing growth slows but exports still strong

03 October 2017
United Kingdom manufacturing growth slows but exports still strong

Currency weakness was reportedly the main reason leading to higher input costs (the rupiah being under pressure - like other emerging market currencies - amid renewed U.S. dollar strength).

Commenting on the Malaysian Manufacturing PMI survey data, Aashna Dodhia, economist at IHS Markit said: "The underlying indicators that signalled some signs of recovery in the manufacturing sector in August proved to be transitory as operating conditions were broadly unchanged in September". Planned overseas expansion is contributing to a positive outlook for the sector, as manufacturers look to increase their worldwide client bases, expand into new territories and invest in new products and greater efficiency, both at home and abroad.

Poland's Purchasing Managers' Index (PMI) rose to 53.7 in September from 52.5 in August, according to Markit, a provider of financial information services. Sales have increased to Europe, China, the USA and South America.

A neutral PMI rating of 50 means that businesspeople in the country feel that trends in industry will not change over the coming month.

Input price inflation quickened to the highest rate in five months due to higher raw material costs, the survey showed. However, manufacturers faced higher commodity prices and supply chain pressures and were having to contend with the lower value of sterling since the Brexit vote.

"By assessing and working to manage the currency risks posed by these key market influences, manufacturers can plan for rising costs and take steps to minimise their impact on the business". Will they be able to absorb these rising costs, or will they need to be passed on to the end user? All three broad sectors saw a production increase, led by consumer goods firms.

"The survey data pointed to further slowing in output growth and a modest sales trend while employment shrank again as firms indicated sufficient manpower to meet production demand", he added. "There were also reports of rising cost inflation affecting production levels", added Aw.

The latest figures show manufacturing production rose for the 14 consecutive month, but eased back from August's recent high.