Markets
Strong Domestic Demand Boosts U.K. Manufacturing
- Strong Domestic Demand Boosts U.K. Manufacturing
U.K domestic demand helped sustain growth in the manufacturing sector in May.
The Purchasing Managers Index moderates to 56.7 in May from 57.3 recorded in April, according to IHS Markit. This is more than the 56.5 predicted by economists and above the 50 level separating expansion from contraction.
According to Markit, growth is largely being driven by strong domestic demand, with new orders optimism at a 20-month high and the biggest jump in backlogs of work in six years.
“The sector should have sufficient momentum to see it through the uncertainty generated by the current unexpected general election and into the start of Brexit negotiations later in the quarter,” said Rob Dobson, senior economist at Markit.
However, the manufacturing sector account for a small portion of the entire economy. Therefore, its performance may not be enough to boost weak growth and offset Brexit potential challenges.