The sector saw faster increases in both new business and output. Markit’s Chief Business Economist, Chris Williamson said: “News of the PMI hitting a five-month high brings a sigh of relief, but manufacturing is not out of the woods yet. The September improvement fails to prevent US goods producers from having endured their worst quarter for a decade. Given these PMI numbers, the manufacturing recession appears to have extended into its third quarter.” Meanwhile, in the run-up to the Halloween Brexit deadline, the UK manufacturing sector rebooted Brexit preparations, pushing the manufacturing PMI up to a four-month high of 48.3.
However, Sterling fell as the index remained below the 50 no-change mark for the fifth month in a row.
Added to this, Markit’s data revealed the ongoing weakness within the sector was filtering through to the labour market, sending staffing levels plummeting at the fastest pace since February 2013.
Manufacturing confidence was also left subdued and commenting on this, Markit Director, Rob Dobson said: “The shroud of uncertainty also weighed on the manufacturers’ confidence, which remained at one of its lowest ebbs in the survey history. These headwinds all ensure that manufacturing will likely remain a drag on UK economic growth during the months ahead.”
Looking ahead to Wednesday, if September’s construction PMI shows the construction sector remained mired in contraction territory, the pound could fall against the US dollar.