UK PMI Falls Sharply, Impacted by Middle East Conflict
UK business activity weakened sharply in March, reflected in the S&P Global Composite PMI (flash), which fell to 51.0 from 53.7 in February. The weakening was due to a slowdown in both the services and manufacturing sectors, indicating pressures are beginning to spread across the UK economy as the Middle East conflict worsens sentiment and costs.
The Services PMI fell significantly to 51.2 from 53.9, while the Manufacturing PMI fell to 51.4 from 51.7. While still above the 50-point threshold (expansion), these sharp declines indicate that growth is starting to "shrink" and the risk of a slowdown becomes more real if the pressure persists.
According to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, output growth in manufacturing and services "slowed to a near-crawl" as companies attributed the loss of business directly to events in the Middle East. Factors cited include increased customer risk aversion, soaring price pressures, higher interest rates, and disruptions to travel and supply chains.
In the currency market, GBP/USD weakened by around 0.3% to 1.3380. However, the pound's weakening is considered to be driven more by the dynamics of the Middle East conflict and movements in global risk sentiment than solely by the PMI data.
Source: Newsmaker.id
