GB: CIPS/PMI Manufacturing Index


Mon Jun 01 03:30:00 CDT 2015

Consensus Actual Previous Revised
Level 52.5 52.0 51.9 51.8

Highlights
Following its surprisingly sharp deceleration in April, UK manufacturing activity recovered a little momentum in May. Even so, at 52.0, the sector PMI was up only 0.2 points versus its marginally weaker revised April reading, short of market expectations and indicative of just a very modest pace of economic expansion.

Still, the rise in new orders was sharper than at the start of the quarter and dominated by domestic demand as a strong pound continued to keep a lid on exports. Headcount expanded again but more slowly than at any time during the twenty-five month upswing so far.

Inflation developments were mixed. Hence another fall in input costs contrasted with the first increase in factory gate prices in five months.

May's PMI results are probably rather more downbeat that the latest prognosis from the CBI but both bodies suggest that relatively sluggish manufacturing growth this quarter will lag the other major sectors of the economy. Nonetheless, it is clear that the high level of sterling remains a significant thorn in the side of UK industry and the BoE and businesses alike would be more than happy to see the exchange rate weaken significantly over coming months.

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.