EEF comments on first PMI to capture impact of Brexit vote

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Commenting on today’s PMI, Zach Witton, Deputy Chief Economist at EEF, the manufacturers’ organisation, says: “The flash PMIs for manufacturing and services out today suggest the UK economy has been hit hard by uncertainty following the EU referendum vote.

“Manufacturing looks to be weathering the storm slightly better than the services sector, as manufacturers have seen somewhat of a boost in export orders following the depreciation in Sterling. Yet the flip side is a spike in input costs as the weaker Sterling is pushing up import prices.

“The very sharp pause in activity indicates that manufacturers have reacted to the shock of the referendum result by adopting a wait-and-see approach. A key question is how long this will be sustained, as a failure to restart activity will have implications for their appetite for investment and recruitment, and thus have an implication for the real economy. The uncertainty surrounding the outlook for manufacturing highlights that there is potential for the Government to shore up confidence in the coming months.”

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