UK Manufacturing Rises: How It Will Impact the Economy?



UK manufacturing purchasing managers’ index

According to IHS Markit, the UK manufacturing PMI (purchasing managers’ index) stood at 58.2 in November 2017, the highest level seen in 51 months. The index stood at 56.6 in October 2017, and the expectation for November was 56.5.

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Why did UK manufacturing rise?

The UK manufacturing PMI score rose due to the following factors:

  • higher production output
  • new business and export orders
  • employment growth

In November 2017, production and new orders grew at their highest rate in four years, employment reached its highest level since January 2014, and manufacturing production reached its highest level since September 2016. On November 2, 2017, the Bank of England raised its key interest rate for the first time in more than ten years by 25 basis points. Significant improvements in inflation and unemployment are major reasons behind the rate hike. The central bank’s hawkish stance suggests it is optimistic about future economic growth.

ETF performance in November

The iShares MSCI United Kingdom ETF (EWU), which tracks the performance of the United Kingdom, fell 0.1% in November 2017, and the FTSE 100 (UKX-INDEX) fell 2.2%. In the next part of this series, we’ll analyze Germany’s manufacturing PMI data in November 2017.


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