Weak manufacturing data sends FTSE down
The Chartered Institute of Purchasing & Supply’s monthly index of manufacturing fell to 49.7 in August from 50.2 in July – a figure below 50 indicates contraction.
Today’s figures have surprised many analysts who predicted a rise to 51.5, after growth was reported in July for the first time since April last year.
Meanwhile, the new orders index declined from 54.8 to 52.4 in August but export orders stabilised, bringing a year of contraction to an end.
Commenting on the figures, CIPS chief executive, David Noble, described the future picture for the UK manufacturing sector as “still uncertain” and said “concerns will remain that the improvements seen in recent months may have been temporary rather than a sustainable recovery.”
The news sent the FTSE 100 down by 60.85 points to 4,845.05. Last week, positive economic news sent the FTSE up to a 10-month high.
However, on a positive note, factory output has risen at its fastest pace since December 2007, with small and medium-sized companies and larger producers posting the best growth.