Did the UK Election Affect Manufacturing in June?
The UK’s manufacturing PMI recorded a weaker improvement in June 2017. It stood at 54.3 in June compared to 56.3 in May.
Jul. 11 2017, Updated 9:08 a.m. ET
UK’s manufacturing PMI in June
The UK’s manufacturing PMI recorded a weaker improvement in June 2017. It stood at 54.3 in June compared to 56.3 in May. Still, it’s far above the market expectation of 56.5.
The weaker improvement in the UK (EWU) manufacturing PMI was mainly due to slower expansion in production activity. New orders and export orders also rose at a weaker pace in June. Demand from both domestic and international clients (ACWI)(VT) slowed.
UK election
After the UK’s general election on June 8, 2017, Prime Minister Theresa May’s Conservative party lost its majority, creating instability. This change dragged the consumer confidence index down in June. The consumer confidence index stood at -10 in June, compared to -5 in May.
The iShares MSCI United Kingdom ETF (EWU) tracks the performance of the United Kingdom. It fell nearly 1.6% in June 2017. The UK’s FTSE 100 index fell nearly 2.3%. The fall in the major index and ETF signals that investors become worried about the UK economic environment after the election.
In the next part of this series, we’ll analyze the performance of US non-farm payrolls in June 2017.
