GB: CIPS/PMI Manufacturing Index


Tue Dec 01 03:30:00 CST 2015

Consensus Actual Previous Revised
Level 53.6 52.7 55.5 55.2

Highlights
UK manufacturing disappointed in November. At 52.7, the headline PMI was down 2.5 points from a slightly weaker revised October reading but still far enough above the 50 growth threshold to indicate a moderately decent period for business activity.

Production growth, which was down on the previous month, remained underpinned by rising new business although the increase here was also short of the previous period's gain. The advance in output was led by a still strong consumer sector but, while investment goods similarly enjoyed a good month, intermediate goods producers experienced a sharp slowdown. Staffing levels were little changed after October's hefty advance but would have decreased were it not for rising headcount in the consumer goods sector.

Prices were weak across the board with both input costs and factory gate charges posting absolute declines.

Following a poor third quarter it looks as if manufacturing returned to positive growth in the final three months of the year. However, expansion rates remain relatively subdued and if the 0.5 percent quarterly increase in real GDP recorded in July-September is to be surpassed, services will have to pick-up the slack. Certainly, manufacturing continues to put no pressure on the BoE MPC to hike interest rates.

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.