03 September 2012 13:56 [Source: ICIS news]
LONDON (ICIS)--The UK Purchasing Managers Index (PMI) for manufacturing has reached its highest level in four months, rising to 49.5 in August from 45.2 in July, according to a survey released on Monday by financial information company Markit and the Chartered Institute of Purchasing & Supply (CIPS).
Although still below the 50 mark – the watermark for an expanding market -, the figure represents a stabilisation in the UK manufacturing sector after last month’s slump, a recovery driven in part by higher prices for oil and related by-products, the analysts said.
More robust oil prices helped to offset weak metal and plastic prices. Manufacturers also displayed a preference for reduced pre- and post-production inventories, and scaled back investment in raw materials over the course of the month.
Despite a more positive performance overall, the immediate outlook for the UK manufacturing sector remains difficult, the survey said, driven by weak demand and prevailing economic difficulties in Europe.
Rob Dobson, senior economist at Markit, said: “The August readings for production and new orders do little to change the underlying picture of a fragile sector facing enormous headwinds.”
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