UK manufacturing growth 'hits 10-month low'

doire_2

Some good news and bad news in the article



http://www.bbc.co.uk/news/business-11450103

UK manufacturing grew at its slowest pace for 10 months in September, raising concerns about the strength of the recovery, a survey suggests.
The purchasing managers' index (PMI) fell to 53.4 last month, from a revised 53.7 in August.
It also showed export orders falling for the first time in more than a year.
Weak order books suggest that the "slowdown in production has further to run," said Rob Dobson at Markit, which helps compile the survey.
Despite the weak figure, Mr Dobson said that "some reassurance can be gained from the fact that growth has merely slowed from an exceptionally strong rate in the first half of 2010".
The manufacturing sector has now recouped more than 30% of the losses it sustained during the recession, he said.
"However, more worrying is the order book trend, with total orders rising only slightly following the marked downshift in August, and new export orders falling for the first time since June 2009.
"The PMI therefore suggests that companies have become more cautious in terms of capital spending."
The UK economy grew by 1.2% between April and June, but most economists expect growth to slow in the coming months, largely due to government spending cuts designed to reduce the budget deficit

StevieJ

A figure of plus 50% indicates growth, good news then.

Despite the weak figure, Mr Dobson said that "some reassurance can be gained from the fact that growth has merely slowed from an exceptionally strong rate in the first half of 2010".

Batchy

Growth is growth, it doesnt matter how you dress it.

Those of you who dont work in manufacturing need to understand that obviously order books are to blame primarily, but also, there could be feedstock availability problems or financing problems with reported figures.

I work within a company that makes the raw material used in a lot of production in the UK and in August, compared to July we had a huge month, now September, was even bigger. If you think things are slowing down, think again. September is a big tell tale sign about the potential.

Things are positive for the future IMO.

The trouble with the supply and demand curve. When demand is lowered due to de-stocking (lowering stock levels, and ordering just in time), in later months when prices fall as a result of the huge pent up demand prices rise substantially, then everyone gets itchy feet and re-stocks so prices rise even further, there is no smoothing down, its ridiculous, and very much a market trader (bidding up and bidding down) mentality.

I think monthly Manufacturing analysis is a waste of time, people should look at rolling annual figures, and leave it at that!

tomterm8

Broadly speaking, good news then (the economy was always going to slow down from 1.2% growth a quarter, but has not slowed down very much from these figures).

Thrugelmir

Those of you who dont work in manufacturing need to understand that obviously order books are to blame primarily

Order books or sales pipelines are a critical part of running any business. As it determines whether a Company expands, i.e. seeks finance, or contracts i.e. cut overtime or worse lay off staff.

nearlynew

Does any body here understand what "growth" actually means?

chewmylegoff

nearlynew wrote: »

Does any body here understand what "growth" actually means?

Weak order books suggest that the "slowdown in production has further to run," said Rob Dobson at Markit, which helps compile the survey.

Rob Dobson certainly doesn't - he thinks that growth = less production.

Generali

chewmylegoff wrote: »

Rob Dobson certainly doesn't - he thinks that growth = less production.

What he is saying is that the rate of increase is falling, not that growth has gone negative. The first derivative is lower but the number itself is higher than in the last period measured.