JN Fund Managers’ Weekly Market Update January 13-17, 2020
UK Manufacturing PMI at Nine Month High of 49.8
According to the latest release from IHS Markit, the UK manufacturing index has grown by 2.5 points, to 49.8 in January 2020, over the 47.5 recorded in December 2019. The latest reading, which is just marginally below the 50.0 threshold, signals broadly stable business conditions in the manufacturing sector at the start of the new year. The release noted that the month over month increase in the index was due to higher levels of new work and marginal jobs growth and tempered by the accelerated fall in stocks of purchases. The PMI survey tracks the overall sentiment among purchasing managers at manufacturing, construction an or services firms.
Manufacturing production fell in December, however at a reduced pace, the lowest rate of decline since June 2019. The report noted that the lower output was linked to a lack of pressure on operating capacity and some extent the ability to fulfil orders from inventories which were accumulated to deal with Brexit uncertainty. We believe that the reduced uncertainty surrounding Brexit and the recent signing of the phase one US and China trade deal may lead to further improvement in this indicator, the progress made is likely to boost consumer and business confidence over the short to medium term.
