British Manufacturers Should Slow Down Their Production Activities In Response To European Hoarding.

According to the financial times, British manufacturers are worried that the supply chain is facing a sudden disruption, which has been restocking at the end of October before the euro deadline, resulting in a slowdown in factory production activities.

The Purchasing Managers'Index (PMI) of IHS Markit, the economic forecasting and business consultancy, increased from 47.4 in August to 48.3 in September, higher than Reuters (Reuters) economists expected to slightly deteriorate to 47. After the announcement, the pound rose slightly, but the PMI index was below 50, indicating that the production activity of most enterprises was still shrinking.

The contraction of manufacturing activity in September was more moderate than expected, partly attributable to the re start of stockpiles. Rob Dobson, chairman of IHS Markit, said that some manufacturers noticed that customers were stockpiling goods for the upcoming Euro departure period, which was compared with the customers who had to shift the production line out of Europe. So far, the inventory activity of manufacturing industry is still lower than the original preparation for March 29th. It is speculated that the inactive stock activity may be influenced by the September legislation to prevent the no agreement from the European Commission.

Samuel Tombs, an economist at Pantheon Macroeconomics, a consultancy, said that domestic customers avoided investment in the absence of European uncertainty and political instability. Overall orders were reduced; European customers removed suppliers and enterprises from the UK, and new export orders had been reduced for sixth consecutive months. In addition, in the global recession, the British manufacturing industry may continue to reduce production capacity, and is unlikely to have a major breakthrough.