Connect with us

Hi, what are you looking for?

Editor’s Pick

Private sector growth flat in August as demand falls, PMI shows

Growth in the private sector edged closer to stagnation this month, with the manufacturing sector shrinking and growth in the dominant services sector weakening.

The reading for the S&P Global/CIPS flash composite purchasing managers’ index dropped to 50.9 in August from 52.1 in July, its lowest since February 2021 and close to the 50 level that separates growth from contraction.

Output in services, which accounts for about four fifths of the economy, remained in growth. It edged down to 52.5 from 52.6 the previous month but still the pace of growth was the slowest since the lockdown early last year.

A fall in demand, staff shortages and long delivery times for materials led to a contraction in manufacturing. The PMI reading for the sector dropped to 46 in August from 52.1 in July.

Forecasters have warned that the UK is close to a recession, with the Bank of England expecting it to begin in winter when another jump in energy bills squeezes household incomes and erodes demand. PMIs in the US and eurozone have already fallen below 50.

New business rose slightly in August, driven by a greater number of new orders for service companies. Manufacturers registered the sharpest fall in new business since May 2020.

There was a slowdown in price rises for producers from 14.6 per cent in July to less than 6 per cent this month.

Annabel Fiddes, economics associate director at S&P Global market intelligence, said: “The UK private sector moved closer to stagnation in August as mild growth of activity across the service sector only just offset a deepening downturn at manufacturers. Waning customer demand amid the weaker economic outlook and shortages of both staff and inputs were reported to have hit goods producers hard, with firms registering the quickest drops in output and new work since May 2020.”

Manufacturing output fell for the first time since February 2021 in the three months to August, with no growth expected in the next quarter, according to research by the CBI, which represents businesses, and Accenture, the professional services company.

The survey of 257 manufacturers found new orders below “normal” levels for the first time since last April.

Even though output rose in 10 of the 17 sectors surveyed, a decline in the production of food, drink, tobacco, mechanical engineering and paper pulled down the headline figure.

Alpesh Paleja, CBI lead economist, said: “Manufacturers continue to operate against a background of high input costs and significant operational delays. When coupled with an oncoming economic downturn, it’s not surprising to see orders and activity ebb away.”

He added: “With expectations for future growth subdued, steps will need to be taken to shore up confidence in the short to medium term — particularly supporting vulnerable firms and consumers with energy price rises.”

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

News

PHILIPPINE STAR/ MICHAEL VARCAS WASHINGTON D.C. — The United States is seeking to form a coalition of countries to drive negotiations on a global...

News

Buildings are seen along EDSA in Quezon City. — PHILIPPINE STAR/ MIGUEL DE GUZMAN By Diego Gabriel C. Robles  THE WORLD BANK (WB) upgraded...

News

Heavy traffic is seen on the southbound lane of EDSA in Cubao, Quezon City. — PHILIPPINE STAR/ MIGUEL DE GUZMAN THE PHILIPPINE auto industry’s...

News

REUTERS THE BANGKO SENTRAL ng Pilipinas (BSP) may deliver a second off-cycle rate hike in early November when the US Federal Reserve is expected...

News

Vendors arrange their goods at a public market in Manila. — PHILIPPINE STAR/ RUSSEL A. PALMA THE ASIAN Development Bank (ADB) is planning to...

Editor’s Pick

With the reversal of the 1.25% rise in National Insurance Contributions happening on the 6th of November, employers across the nation have an opportunity...

You May Also Like

News

BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...

News

KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

News

REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...

News

COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.