What Does the UK’s Manufacturing PMI Tell Us about Its Economy?
UK’s manufacturing PMI in October
The UK’s manufacturing PMI (purchasing managers’ index) stood at 56.3 in October 2017, compared with 55.9 in September 2017, and beat the preliminary market expectation of 55.8.
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The stronger UK manufacturing PMI in October was mainly due to the following:
- stronger improvement in production output and volumes in October
- faster expansion of new orders and export orders in October
- faster rising job creation in the manufacturing sector that month
Domestic market conditions improved in the UK in October 2017. After the huge ups and downs we’ve seen in economic activity in the past year, the economy is now showing signs of strength. Following the Brexit referendum, the UK’s business confidence index tumbled a bit, but these improvements in domestic economic conditions are a positive sign.
Performance of index and ETF
The iShares MSCI United Kingdom ETF (EWU), which tracks the performance of the United Kingdom, rose nearly 0.6% in October 2017. The UK’s FTSE 100 index rose 0.7% in October.
In the next part, we’ll analyze the performance of the US non-farm payroll in October 2017.