Markets

United Kingdom and Eurozone manufacturing growth shows signs of slowdown after stellar 2017

United Kingdom and Eurozone manufacturing growth shows signs of slowdown after stellar 2017

British manufacturing growth slid to a 17-month low in April, sending sterling sinking and further reducing the chances of an interest rate hike by the Bank of England next week.

Growth in Italian manufacturing activity slowed in April to its weakest rate in more than a year, a survey showed on Wednesday, casting some doubt over the country's near-term economic expansion outlook.

The Pound US Dollar (GBP/USD) exchange rate crashed around 1% on Tuesday, with the pairing striking a new three-month low as the release of a robust US manufacturing PMI accentuated the pairing's losses.

Reflective of stronger client demand, new business received by manufacturers rose at an accelerated rate that was the most rapid since September 2014.

New business expanded at a faster pace than in March, though future business expectations eased to the lowest in seven months.

The IHS Markit China Manufacturing Purchasing Managers Index (PMI), produced in conjunction with the Caixin Insight Group, rose to 51.1 in April in seasonally adjusted terms, up from 51.0 in March.

United Kingdom manufacturing sector fell to 17-month low of 53.9 compared to forecast of 56.5. Panelists also said backlogs of work declined for the 47th consecutive month in April as there were sufficient resources to complete work in time.

"A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally contracting". The gain in new business was equally solid and faster than the previous survey period. The rate of input price inflation also was shown to have accelerated to the sharpest in nearly seven years.

"The Indian manufacturing economy started the quarter on a slightly stronger footing as growth picked-up from March's five-month low, buoyed by stronger demand conditions", said Aashna Dodhia, economist at IHS Markit.

Slower increases in new orders and employment caused the weaker growth signaled by the headline PMI, the report added. New orders remain too few and far between, with just a small improvement in the level of extra work reported this month.

It also said that firms continued to shed staff, while inflationary pressures moderated sharply.