Weak sterling post-Brexit vote boost manufacturing exports
The latest numbers in the Markit/CIPS purchasing managers’ index (PMI) suggest that the weak sterling rates since the June 23rd Brexit referendum result has been good news for exports.
The news has provided a boost for sterling although does augur inflationary worries and has meant increased costs for business.
The PMI increased to 53.3 in August up on July’s figure of 48.3. Apparently a figure above 50 indicates expansion.
As economist Rob Dobson at IHS Markit said: “The August PMI data indicate a solid rebound in the performance of the UK manufacturing sector from the steep downturn that followed the EU referendum. The domestic market showed a marked recovery, especially for consumer products, while the recent depreciation of sterling drove higher inflows of new business from the US, Europe, Scandinavia, Middle East and Asia.”
The survey mirrors what many ecommerce sellers have been reporting: a weak rate for sterling is good news for exports but costs on importing supplies does also inevitably increase.