PwC comments on the UK Manufacturing PMI for October

Commenting on the S&P Global/CIPS United Kingdom Manufacturing PMI for October, 

Cara Haffey, Manufacturing and Automotive lead at PwC UK said:

“Sector optimism, though robust, showed some signs of strain in October, as the PMI notes that 54% of manufacturers expecting growth to rise over the coming year was a ten month low. 

“The focus for many in the sector continues to be centred around the digitalisation of services in order to boost productivity and benefit from cloud-based operational insights. However, the justification of such significant capital expenditure is made more difficult when order books are reduced, global export rates are lowered and interest rates continue to affect financing costs.

“Whilst many will be hoping for an uptick in demand brought by the festive period, particularly for consumer manufacturers who may have produced goods in advance, recent PwC research showed that 30% of consumers plan to spend less on Christmas shopping, primarily due to the cost-of-living. It’s therefore no surprise to see PMI respondents cite consumer uncertainty and the cost of living crisis as key reasons for a falling rate of growth optimism over the next year. 

“Many will be hoping for good news on interest rates, given the relative stability provided by the last update. With input costs and output charges both decreasing, as well as purchasing prices for key materials falling for the sixth month in a row both influenced by weak demand, interest rates maintaining, or better, falling, would help to provide reassurance to future growth plans and hopes for the revival of market conditions.”