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drrayjo

Factory Pmi Falls Unexpectedly In September

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Recovereh?

LONDON (Reuters) - The manufacturing sector shrank unexpectedly in September as employers cut jobs for a 17th straight month and the pace of pick-up in new orders slowed, purchasing managers' data showed on Thursday.

ANALYST REACTION

STEPHEN LEWIS, MONUMENT SECURITIES

"It was slightly below the 50 line which suggests that at best UK manufacturing is bumping along the bottom. The exports have been relatively firm in this survey for quite a while, but some of the other features ... employment is not particularly good and that labour shedding may well continue for several months to come and act as a drag."

ALAN CLARKE, BNP PARIBAS

"It was a bit disappointing really, we had expected it to pick back up above the crucial 50 expansion threshold but it didn't."

"One glimmer of good news in there was that export orders jumped, so good tangible evidence that weakness in sterling, not just recently but at the start of the year, is having some benefits. But still nothing really to celebrate about. We're not nearly as weak as we were six months or so ago but we're still not strong."

PHILIP SHAW, INVESTEC

"The headline number is disappointing given the run of official data we've seen. One might have hoped that the index would have climbed over the 50-point level. But it is nonetheless reassuring to note that the export orders index has climbed over the month, which would be in line with the rebalancing in the economy spoken of by Bank of England Governor Mervyn King recently."

ROB DOBSON, ECONOMIST, MARKIT

"At first glance the latest PMI data are disappointing. The headline index posted below its neutral mark for the second month running and came in below market expectations. Growth of output eased sharply, new order gains were less robust than in August and the downturn in the capital goods sector took a turn for the worse. Job losses are still running at a rapid pace.

"However, the picture is one of consolidation not contraction in September. New orders are rising, sterling is supporting export sales as overseas markets improve and the key orders-inventory ratio remains at an elevated level. All this means that manufacturing should provide a positive contribution to GDP in Q3.

"Looking ahead, the data are still broadly consistent with a solid rebound following by a subdued recovery. But the outlook remains uncertain given the current reliance on price discounting and fiscal support."

http://uk.biz.yahoo.com/01102009/325/instant-view-factory-pmi-falls-unexpectedly-september.html

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