Eurozone manufacturing surges and UK factories keep growing – business live

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All the day’s economic and financial news, including a new health check on the world’s factories

12.03pm BST

We’ve got bad news for wine lovers out there. The average price of a bottle in the UK has risen over £5.50 for the first time ever.

That’a according to the Wine and Spirit Trade Association, which blames the fall in sterling following last June’s EU referendum.

“Last year the WSTA predicted that Brexit and the fall in the value of the pound, compounded by rising inflation, would force the UK wine industry to up their prices. Sadly this is now a reality as an average priced bottle of wine in the UK is at an all-time high. Unfortunately, for both British businesses and consumers, we are clear that this is not a one off adjustment, but rather that wine prices will continue to rise.

What is even more concerning is that this does not take into account the inflationary duty rise – at a painful 3.9% – on alcohol inflicted by the Chancellor in the March Budget.

Chateau Brexit? Average price of bottle of wine reaches record high

11.32am BST

Billionaire-turned-philanthropist George Soros has weighed in on Brexit this morning, saying the European Union needs to be radically re-invented.

Soros also argued that Britain’s departure from the EU will take much longer than the two-year window set under the Lisbon Treaty.

“Negotiating the separation with Britain will divert the EU’s attention from its own existential crisis, and the talks are bound to last longer than the two years allotted to them.

Five years seems more likely.”

The European union is now in an existential crisis, says @georgesoros #EUBEF2017

Soros: The EU is now surrounded by hostile powers, Putin’s Russia, Erdogan’s Turkey and the America Trump would like to create… but can’t

Brexit divorce will take about five yrs, says @georgesoros, who urges EU not to punish Britain.

New jargon alert: George Soros says ‘instead of a multi-speed Europe, we should aim for a multi-track Europe’.

Europe’s biggest threat is the danger of a banking and migration crisis in Italy, says @georgesoros

10.40am BST

There’s unrest at the Bank of England this morning. Workers at Britain’s central bank are to be balloted on strike action, after being offered a pay rise of just 1%.

“The bank’s disgraceful snub of low paid staff stinks of arrogance and represents an organisation thoroughly out of touch with the reality of the pressure staff face meeting their costs of living.

“It is a source of shame that an iconic symbol of financial services in the UK is choosing to ride roughshod over the concerns of its dedicated and hardworking staff and impose this derisory pay deal.


The @bankofengland branded “arrogant and out of touch” by @unitetheunion after 1% pay rise for staff. Possible strike on the cards.

10.10am BST

Economists have welcomed the news that Britain’s manufacturing PMI dipped to 56.7 in May, from 57 in April, showing solid growth.

Duncan Brock of the Chartered Institute of Procurement & Supply says manufacturers are shrugging off political uncertainty:

“While not quite hitting the heights of April’s rebound in activity, the manufacturing sector didn’t disappoint with a sustained rise in purchasing activity, output and new orders, optimism at a 20- month high, and storming ahead unfazed by the looming election.

“The domestic market persisted as the driving force, but the weak pound’s continuing bounty meant levels of export orders also increased, for the thirteenth month, as export markets made use of the competitiveness of UK firms.

Output and orders expansion is being driven by resilient demand coming through UK supply chains and a better looking global economy than UK manufacturers have been used to for some time.

Exporters have continued to take advantage of a weak sterling, which has kept British exports competitive on a global stage, and at a time when the world economy is showing signs of improvement. However, rising cost pressures are still circling, not only from elevated import costs but also from the growing effect of domestic costs from sources such as energy and staffing which will all contribute to fuelling inflation.

Although manufacturers have resisted passing on these costs to date, the expectation of price rises is becoming more apparent in the sector.”

Today’s figure is above 50, meaning expansion is still happening, it’s just that the rate has slowed compared to last month. There are a number of reasons for that, mostly stemming from the weaker pound pushing up import cost for factories and therefore prices for the end consumer. It also means consumers have less disposable income, because their food and fuel bills have risen. The price of oil has also increased, leading to higher fuel costs for manufacturers.

“The key will be exports, because the weaker pound means factories may receive more orders from abroad, which could offset some domestic pain.”

UK manufacturing PMI showed export growth weakened in May, but still robust

9.51am BST

Britain’s manufacturing sector has continued to shrug off Brexit, by posting “further marked growth in May”.

That’s according to today’s PMI survey from Markit, which shows that UK factory growth was close to April’s three-year high.

“The strong PMI numbers suggest the manufacturing sector has gained growth momentum in the second quarter after the sluggish start of the year. The ongoing strength of the domestic market remains the main driver of the upturn.

Growth of new export business played a lesser role in comparison, with the trend in foreign demand continuing to improve only in fits and starts, despite the assistance of a historically weak sterling exchange rate.

9.35am BST

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9.32am BST

Italy’s growth rate has been revised sharply higher, in another sign that Europe’s recovery is strengthening.

Italian GDP rose by 0.4% in January-to-March, new figures show. That’s twice as fast as first estimated.

Now Italy GDP revised up 20bp, to 0.4% in Q1. With France and others we’ve got about 40% of the euro area with unusually large revisions.

9.23am BST

Here’s more details of the surge in manufacturing employment across the eurozone last month:

Staffing levels rose at quicker rates in Germany (six- year high), Italy (just below October 1999’s series- record), Spain (fastest in 19 years), Ireland (two-year peak) and Austria (two-month high). Slower increases were registered in France and the Netherlands, while Greece reported jobs growth for the first time in six months.

9.14am BST

Newsflash: Eurozone factories have just racked up their fastest growth in six years.

The euro-area manufacturing PMI has come in at 57.0, up from 56.7 in April, thanks to faster growth in output and new orders. Any reading over 50 shows growth.

The ongoing expansion of the eurozone manufacturing sector gathered further momentum in May. Growth in output and new orders accelerated to the best seen for around six years, to underpin the strongest job creation in the 20-year survey history.

“The eurozone upturn is developing deeper roots as factories enjoy a spring growth spurt. Demand for goods is growing at the steepest rate for six years, encouraging manufacturers to step up production and take on extra staff at a rate not previously seen in the two-decade history of the PMI survey.

“The fact that the upturn is being accompanied by such strong jobs growth sends a signal that increasing numbers of companies are moving away from a focus on cost cutting towards investing in expansion, underscoring the elevated levels of business optimism seen across the region. The record hiring adds to the sense that the upturn is looking more and more robust as each month goes by.

9.00am BST

Germany’s factories have expanded faster than their French rivals last month:



8.52am BST

Good news from Spain! Spanish factories are taking on new staff at the fastest rate since 1998, after posting another month of growth.

The Spanish manufacturing PMI hit a four-month high of 55.4 in May, up from 54.5 in April.

“May was an excellent month for workers in the Spanish manufacturing sector as firms took on staff at the strongest pace for 19 years.

Moreover, with new work rising healthily again and further signs of capacity coming under pressure, the likelihood is that jobs will continue to be created at a decent clip over the near-term at least.

8.46am BST

The first eurozone manufacturing report of the day was quite a belter.

Ireland’s factory PMI jumped to 55.9 in May from 55.0 in April, signalling “a marked improvement in business conditions”. That’s the highest level in 22 months.

Respondents linked higher output to rising new orders and improving economic conditions.

New business also rose at a faster pace in May amid reports of stronger client demand.

8.45am BST

Related: UK house prices fall for third month in a row

8.25am BST

We have fresh evidence that Britain’s housing market is cooling.

House prices fell by 0.2% in May, reports Nationwide, which is the third monthly fall in a row. That hasn’t happened since 2009 – the dark days of the financial crisis.

“House prices recorded their third consecutive monthly fall in May – the first time this has occurred since 2009. The annual rate of growth slowed to 2.1%, the weakest in almost four years.

“It is still early days, but this provides further evidence that the housing market is losing momentum. Moreover, this may be indicative of a wider slowdown in the household sector, though data continues to send mixed signals in this regard.

House prices – not so strong and stable.

8.14am BST

Worries over China’s economy are intensifying this morning after new data showed its manufacturing sector is shrinking.

The Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) fell to 49.6 in May, from 50.1 in April. That signals that activity contracted last month, for the first time in nearly a year.

The sub-index of stocks of purchases signalled a renewed decline, while the sub-index of stocks of finished goods rebounded, indicating that companies have stopped actively restocking as inventories began to stack up. China’s manufacturing sector has come under greater pressure in May and the economy is clearly on a downward trajectory.”

Oops! #China May factory activity contracts for first time in 11mths. Dip below 50 at odds w/ steady official PMI.

8.02am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

It’s a new month, and that means a new flurry of economic data. June is kicking off with new surveys of the world’s factories, from China to the US via Europe.

Another set of robust numbers would make the Q1 slowdown seem potentially transitory, whereas softer data would instead leave the April upturn looking like a positive blip amidst mounting evidence of a slowing economy. Our economists’ central expectation remains that the consumer-led slowdown will be more durable, so our bias is to look for a pullback in the PMIs to confirm this.

Tonight: Times/YouGov regular weekly poll shows 3pt Tory lead. (Poll different to YouGov model but Tory lead same)

Continue reading…
Source: china
Link : Eurozone manufacturing surges and UK factories keep growing – business live


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