GB: CIPS/PMI Manufacturing Index


Thu Oct 01 03:30:00 CDT 2015

Consensus Actual Previous Revised
Level 51.5 51.5 51.5 51.6

Highlights
UK manufacturing expanded at much the same pace in September as it did in August. At 51.5 the sector PMI was in line with market expectations and just a tick down on its marginally stronger revised mid-quarter print. However, this still constituted its lowest level in three months.

Output developments were very mixed across the major subsectors. Hence, a marked slowdown in the previously robust consumer area contrasted with a solid gain in intermediates and a return to positive growth in investment goods. Consumer goods also saw their first decline in new orders in nearly three and a half years but confidence in the sector was still high enough to prompt a further rise in headcount. Employment was only flat in investment goods and fell in intermediates.

At the same time, inflations news was soft. Hence, tumbling oil prices saw input cost deflation accelerate to its steepest rate since February while factory gate charges were reduced for the first time in three months.

The September PMI results are broadly in keeping with the latest CBI Trends survey. Manufacturing is still expanding but at nothing like the rate seen over much of 2014 and leading indicators point to a difficult fourth quarter. With overall inflationary pressures on the wane, there is nothing here to suggest that the BoE MPC should be contemplating an early hike in Bank Rate.

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.