Manufacturing PMI Index, September 2016 - PwC comments

Published at 10:35 AM on 01 September 2016

In response to the latest manufacturing PMI index, John Hawksworth, chief economist at PwC, commented:

“The manufacturing PMI index rebounded strongly in August after dipping sharply in July immediately after the EU referendum. It seems that, after absorbing the shock of the Brexit vote, manufacturing companies have recognised that nothing much has changed in the short term, other than a fall in the pound that is good for export orders.

“The weakness of sterling has also led to a sharp rise in input costs, however, and this will feed through to consumers over the coming months, dampening domestic demand for UK manufactured goods and offsetting the boost to UK exports.

“There could also be adverse effects on capital goods manufacturers if increased uncertainty reduces business investment, though it will be some months before we get hard data on the scale of this effect. But it is good that, as yet, there are no signs that the UK manufacturing sector has fallen off a cliff in the immediate aftermath of the Brexit vote.”

Cara Haffey, partner at PwC, commented:

“The evidence of new work and orders is also very encouraging. We now know the outcome of the referendum and therefore decisions on projects and new contracts have now been made. The trick in the short term will be to balance the relatively more expensive import costs, and put an increased importance on careful sourcing to maintain the exchange rate benefits on the export market.”

Ends.

For further information please contact Tilly Parke: [email protected] / +44 20 7804 8761


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