GB: CIPS/PMI Manufacturing Index


Wed Apr 01 03:30:00 CDT 2015

Consensus Actual Previous
Level 54.2 54.4 54.1

Highlights
UK manufacturing enjoyed a good March. At 54.4, the sector PMI was up 0.3 points versus its February mark, slightly stronger than expected and indicative of the fastest growth in business activity in eight months.

Both output and new orders saw solid gains, the former recording its most robust increase in nine months and the latter its sharpest advance since July 2014. With the pound still uncomfortably firm, the domestic market was by far the principal source of new contracts. Employment increased for a twenty-third consecutive month, although this may overstate underlying strength as outstanding business declined for a thirteenth month in a row.

Input costs again fell steeply and the rate of deflation was close to January's near 6-year record. As a result, factory gate prices were trimmed.

Today's figures suggest that UK manufacturing made a solid start to 2015. The average PMI for the first quarter was 53.8, signalling the strongest growth (around 6 percent) since the second quarter of 2014. Nonetheless, the weakness of input costs continues to keep factory gate prices in check and to this end the March results should not be seen as putting any additional pressure on the BoE to hike Bank Rate this year.

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.