UK Economy Slowing? - Investec
Research Team at Investec, notes that on Friday data for the UK
manufacturing sector printed a poor result for February, with
month-on-month growth of -1.1% (consensus -0.2%, Investec +0.2%).
Key Quotes
“January
data were also revised down a touch such that year-on-year growth was
-1.8% (consensus -0.7%, Investec -0.2%). We had hoped for an improvement
in factory output as the effect of past rises in the pound dissipates.
But still, UK manufacturers are still finding the going tough in a
challenging global environment.
It’s very hard to say whether
February market volatility and/or Brexit jitters weighed at all on
activity, but we wouldn’t rule it out entirely. The broader industrial
production measure also disappointed relative to expectations, with
growth of -0.3% m/m (consensus +0.1%, Investec +0.6%). The fall in
manufacturing was partly offset by strong growth in oil and gas output,
which grew by +5.4% m/m.
Meanwhile, trade data for February also
disappointed. There was an improvement on the month in the goods and
services balance, to -£4.8bn from (a downwardly revised) -£5.2bn balance
seen in January. However, the February outturn disappointed relative to
the consensus expectation of a -£3.4bn (Investec -£3.1bn).
We
note that in the three months to February, exports fell by 1.7% while
imports grew by 1.2%; export performance continues to disappoint. The
balance of trade in goods was also found to be further in the red than
expected, at -£12.0bn (consensus -£10.2bn, Investec -£10.0bn). Taken
together, a disappointing set of numbers, pointing to continued
challenges for UK manufacturers and exporters.”
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