Factory output growth in the UK reached a 14 month low due to geopolitical risks increasing. The UK manufacturing PMI declined to 52.5 in August a strong decline on last month’s 54.8, and the weakest growth since June 2013. Geopolitical issues in the Ukraine are negatively impacting growth in the factory sector after positive performance through 2013
It has been mentioned that Putin has impacted the manufacturing sector. Russia’s escalation of the conflict in Ukraine has had an adverse impact on the manufacturing sector. It is expected that if the political situation gets worse in the Ukraine manufacturing data will continue to decline.
Also in the UK, the pound gained for a fourth day against the EUR and USD with data showing U.K. mortgage approvals in July exceeded analyst estimates, showing the housing market is growing regardless of the stricter rules around lending.
In Spain its factory sector recorded its ninth consecutive expansion with the index showing growth of 52.8, this is however slightly lower than last months 53.9 in July. But the expansion is still reasonably acceptable due to weakness in other parts of the Eurozone, regardless of the fact it is slower than expected.
Another positive factor in Spain is that firms reported they hired more staff to deal with rising demand. But the flip side to this is some companies also reported that they cut prices to generate more sales.
Germany demonstrated that its economy shrank by 0.2% in the second quarter of 2014, with figures also showing that investment in the construction sector shrank by 4.2%.
In France, data showed that factories declined at the fastest rate in 13 months. The French manufacturing PMI fell to just 46.9, which is significantly lower than the 50 point mark that separates expansion from contraction. New orders and employment levels both declined, demonstrating weakness within the French manufacturing sector.
09.30 GBP - PMI Construction (Aug) expected to fall from 62.4 to 61.4.
15:00 USD - ISM manufacturing (Aug) expected to fall from 57.1 to 56.8
*All times shown are BST
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