UK Manufacturing Growth Stagnates

Growth in manufacturing activity in the U.K. slowed to the lowest level in 20 months at the latest check, raising questions about the strength of the country’s economic recovery as austerity measures come into effect, according to Bloomberg.

Growth in manufacturing activity in the U.K. slowed to the lowest level in 20 months at the latest check, raising questions about the strength of the country’s economic recovery as austerity measures come into effect, according to Bloomberg. On Wednesday, the Markit Economics and the Chartered Institute for Purchasing and Supply reported that the purchasing managers’ index for the U.K. manufacturing sector was down to 52.1 in May from 54.4 the previous month, marking the lowest level since September 2009. The drop continued the trend of slowing growth since the high mark on the PMI of 61.6 that was recorded in January, when the sector’s growth was seen at a 17-year high of 6.6% year-over-year.

The report suggested that some of the slowdown could be due to temporary factors, such as bank holidays around Easter and the Royal Wedding. Nonetheless, Joost Beaumont of ABN Amro said, “Overall, this report points to slowing activity in the manufacturing sector going forward,” adds The Daily Telegraph. Andrew Goodwin of Ernst & Young ITEM Club said, “These results will trigger genuine concern about the sustainability of the recovery.” The drop was led by the first decline in new orders and in output since the middle of 2009, and casts further doubt for some economists about whether the economy is strong enough for the Bank of England to start raising interest rates.

Click here to read the story from Bloomberg News.

Click here for coverage of economists’ reaction from The Daily Telegraph.