UK manufacturing shrank in May 2016

The UK manufacturing activity shrank in May 2016 by 0.5% month-on-month basis. In comparison, in April the jump was 2.3% MoM. On an year-on-year basis UK manufacturing grows by 1.7%. The total industrial production, where manufacturing sector is the largest component, also decreased by 0.5% on a month-on-month basis in May, as in April rose by 2.1%. On an annual basis registered a growth of 1.4%, while the market expected 0.5% increase.

The indicators in the sector are volatile since the beginning of the year. Earlier this month, a private company Markit for example, reported that activity in the sector unexpectedly accelerated in June. The Purchase Managers’ Index orders (PMI) rose from 50.1 points in May to 52.1 points in June.

Analysts expect the referendum on Brexit by the end of June to have a significant impact on the economic performance of the UK, not only in the months after the vote, but in the coming years.

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