London - British manufacturing activity grew at the slowest rate in 14 months in August as factory order books filled at a much slower pace, a survey showed on Monday.
The Markit/CIPS UK Manufacturing Purchasing Managers' Index (PMI) fell to 52.5 in August - its lowest level since June last year and below all forecasts in a Reuters poll - from July's downwardly revised 54.8.
While still holding above the 50-point threshold denoting growth, the PMI suggested the onus will fall on consumers to keep driving Britain's economic upturn in the second half of the year.
The fall in the headline index was driven by the new orders component, which dropped to its lowest since April 2013 at 52.9, down from 56.8 in July in its biggest one-month drop in two years.
Factories also hired staff at the slowest pace since last June.
A separate PMI for euro zone manufacturers also showed growth eased more than first thought, while earlier on Monday Britain's main manufacturing trade body cut its growth forecast for this year after its members reported a big drop in export orders.
“It is becoming increasingly evident that UK industry is not immune to the impacts of rising geopolitical and global market uncertainty,” said Rob Dobson, senior economist at Markit, which compiles the PMI.
“(That's) especially when they affect economic growth and business confidence in our largest trading partner, the euro zone.”
Dobson added that the pace of expansion in British manufacturing still remained slightly above its long-term average, although consumer, intermediate and investment goods producers all experienced a slowdown.
While manufacturing employment increased overall, thanks to hiring from small to medium-sized manufacturers, Markit noted that staffing levels fell at big firms.
Price pressures continued to look muted, as factory gate prices grew at the weakest pace since March, the PMI showed. - Reuters