Stockpiling and job slashing as the UK braces for Brexit
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A survey issued Friday by the IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI), showed that British factories slashed jobs in February and braced for Brexit by stockpiling goods at the fastest pace seen in any Group of Seven country since records started in the early 1990s.
In a Reuters report quoting the IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI), a gauge of activity in British industry, fell to 52.0 from 52.6 in January.
Factories cut jobs at the fastest pace in six years and were increasingly downbeat about the future, the survey showed.
Although stronger than French and German factory PMIs, IHS Markit said the boost to British factory output mostly reflected stockpiling and a drive to cut work backlogs in case the country fails to get a transition deal to smooth the shock of Brexit.
The PMI’s stocks of purchases index rose in February to 59.1, the highest level on record for any G7 PMI.Some 70 percent of factories cited Brexit as the reason behind the record drive to build up stocks of parts and materials, survey compiler IHS Markit said.
Britain’s departure from the European Union is scheduled to take place on March 29, but lawmakers in London have yet to agree on the terms of a divorce deal, leaving open the possibility of a no-deal Brexit.
Business groups have expressed exasperation at the lack of clarity around Brexit and Friday’s PMI of the manufacturing sector – representing about 10 percent of total British economic output – added to signs that the impasse is hurting companies.
