GB: CIPS/PMI Manufacturing Index


Fri Apr 01 03:30:00 CDT 2016

Consensus Actual Previous
Level 51.2 51.0 50.8

Highlights
UK manufacturing continued to struggle last month. At 50.8 the sector PMI was weaker than expected and just a couple of ticks above February's 34-month low.

Output growth stayed positive but only matched the mid-quarter's 7-month trough. New orders similarly made fresh progress but gains in the domestic market were tempered by a third consecutive decline in overseas demand. Employment was also cut for a third straight month and backlogs fell at their steepest rate in more than two years. Meanwhile, price pressures remained firmly of the downside with another drop in input costs and fierce competition prompting a further reduction in factory gate charges.

The first quarter PMI averaged only 51.6, equalling its lowest mark since it moved back above the 50 growth mark back in early 2013. Manufacturing is still in the doldrums and while the Budget was generally quite well received by industry, the near-term outlook looks decidedly flat. Industrial production is unlikely to make much of a contribution to first quarter real GDP growth.

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.