GB: CIPS/PMI Manufacturing Index


Mon Mar 02 03:30:00 CST 2015

Consensus Actual Previous Revised
Level 53.4 54.1 53.0 53.1

Highlights
UK manufacturing momentum picked up usefully last month. At 54.1, the sector PMI was stronger than expected, up a point versus a minimally revised January print and at a 7-month high.

The headline improvement reflected faster growth of output and new orders, notably in the consumer goods industry although both intermediate and investment goods producers also performed well. The increase in overall orders would have been stronger still but the for the weakness of exports which deteriorated for the fourth time in the last five months on the back of subdued conditions in key overseas markets as well as competitiveness losses caused by the appreciation of sterling. The buoyancy of activity was also demonstrated by a jump in employment growth to a 3-month high.

The slide in oil prices continued to feed through into overall input costs which fell nearly as sharply as January's 68-month record. Factory gate charges also declined again.

Taken at face value, today's survey should make for pleasant reading at the BoE. February looks to have been a decent month for UK manufacturing and rising employment and orders suggests there should be further good news to come. However, with factory gate inflation still very subdued, there is still little pressure on the MPC to do anything with Bank Rate at this time. A hike before year-end remains a possibility but not much more than that.

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.