Investing.com - Manufacturing activity in the U.K. deteriorated unexpectedly in February, but remained in expansion territory for the second consecutive month, official data showed on Thursday.
In a report, market research group Markit said that its U.K. manufacturing PMI dipped by 0.8 points to a seasonally adjusted 51.2 in February from a reading of 52.0 in January, whose figure was revised down from 52.1, which was an eight-month high.
Analysts had expected the manufacturing PMI to hold steady at 52.0.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
U.K. manufacturing production and employment continued to expand during February, however, the headwinds faced by the sector were brought into sharper focus by the latest data.
Inflows of total new work and export orders were both broadly unchanged following mild gains in January, while cost inflationary pressures rose sharply.
Commenting on the report, David Noble, chief executive officer at the Chartered Institute of Purchasing & Supply, said, “The manufacturing sector consolidated on January’s sharp increase in growth, but the return of rising oil prices and lackluster demand is a cause of some trepidation.”
“U.K. manufacturers have persisted in working through backlogs of work, but the euro zone crisis continues to loom large with continued declines in new work from the Continent,” he added.
Following the release of the data, the pound held on to modest gains against the U.S. dollar, with GBP/USD easing up 0.08% to trade at 1.5929.
Meanwhile, European stock markets were higher. The EURO STOXX 50 rose 0.45%, France’s CAC 40 added 0.2%, London’s FTSE 100 climbed 0.5%, while Germany's DAX gained 0.4%.
In a report, market research group Markit said that its U.K. manufacturing PMI dipped by 0.8 points to a seasonally adjusted 51.2 in February from a reading of 52.0 in January, whose figure was revised down from 52.1, which was an eight-month high.
Analysts had expected the manufacturing PMI to hold steady at 52.0.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
U.K. manufacturing production and employment continued to expand during February, however, the headwinds faced by the sector were brought into sharper focus by the latest data.
Inflows of total new work and export orders were both broadly unchanged following mild gains in January, while cost inflationary pressures rose sharply.
Commenting on the report, David Noble, chief executive officer at the Chartered Institute of Purchasing & Supply, said, “The manufacturing sector consolidated on January’s sharp increase in growth, but the return of rising oil prices and lackluster demand is a cause of some trepidation.”
“U.K. manufacturers have persisted in working through backlogs of work, but the euro zone crisis continues to loom large with continued declines in new work from the Continent,” he added.
Following the release of the data, the pound held on to modest gains against the U.S. dollar, with GBP/USD easing up 0.08% to trade at 1.5929.
Meanwhile, European stock markets were higher. The EURO STOXX 50 rose 0.45%, France’s CAC 40 added 0.2%, London’s FTSE 100 climbed 0.5%, while Germany's DAX gained 0.4%.