Factory output jumps as stockpiling increases amid Brexit fears
The IHS Markit/Cips manufacturing purchasing managers’ index rose to 54.2 in December from 53.6 in November, beating all forecasts in a Reuters poll of economists, on a scale where a reading above 50 indicates economic growth....The pound’s weakness also helped support export orders, with growth from the US, Europe, China, India, Brazil and Africa...The latest snapshot raises the prospect that Brexit uncertainty may perversely benefit the economy in the short-term by prompting companies to raise their activity levels to prepare for a no-deal scenario.
So -- good because both preparation and output has increased? You might think so, however short-term, but not for the Graun:
Economists, however, warned the boost is likely to only be temporary. Disruption after 29 March could curtail activity, while the removal of Brexit risks could lead businesses to run down their stockpiled goods rather than placing new orders...Rob Dobson, a director at IHS Markit, said the trend in production volumes remained lacklustre despite the stock-building...“Although manufacturers forecast growth over the coming year, confidence remains at a low ebb,” he said.
Quite what measure of confidence R Dobson is using is unclear -- forecasts are no longer reliable?
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