UK Manufacturing activity dropped sharply in October

UK manufacturing activity drooped sharply in October as the manufacturing purchasing managers- index (PMI) fell to 47.4 in October compared to 51.1 reading in the previous month of September. This is the lowest PMI (Purchasing Managers Index ) reading since last 28 months. Any reading lower than 50 indicates contraction. Reading of 47.4 indicates sharp contraction in the manufacturing activity.

The main reasons behind this fall were lower confidence and lower demand amid the current euro zone debt crisis. The export demand of UK manufacturing goods fell sharply due to current debt crisis and lower growth of other European Countries. At the same time, UK has announced its GDP growth rate as 0.5% in the last quarter. With lower manufacturing activity, its GDP growth rate is expected to fall in the last quarter of current financial year.

Manufacturing activity slows in China, Euro zone and US while it marginally improves in India and Japan for the month of October.

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