GB: CIPS/PMI Manufacturing Index


Fri Jan 02 03:30:00 CST 2015

Consensus Actual Previous Revised
Level 53.6 52.5 53.5 53.3

Highlights
UK manufacturing expanded surprisingly slowly at year-end. The sector PMI edged down from a weaker revised 53.3 in November to 52.5, a 3-month low.

However, despite the dip in the headline index the upturn in both production and new orders, which have now been ongoing for some twenty-two months, was reassuringly broad-based and the domestic market was once again the principal source of demand. By contrast, export orders remained relatively sluggish. Employment was up for a twentieth consecutive month and at much the same pace as in November and apparently strong enough to ensure a tenth straight decline in backlogs.

Price pressures remained soft. Hence, input costs were down for a fourth successive month and at the steepest pace in almost two-and-a-half years. Factory gate charges rose, but only slightly and were essentially flat over the quarter as a whole.

While still positive, today's PMI survey results paint a rather more sluggish picture of UK manufacturing than the CBI's December Trends report which was relatively upbeat across the board. In any event, with inflationary signals still well contained, the BoE MPC has plenty of time to determine which survey is the more accurate before making any move on Bank Rate. Certainly, at this stage a hike in official rates in 2015 is far from assured.

Definition
The Markit PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.

Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the ISM manufacturing index in the U.S. and the Markit PMIs elsewhere, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.

The Markit PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.