Service PMI to start the week
After the weak PMI result for manufacturing (down to 51.1 in October from the 53.6 of September) and the more encouraging 53.2 registered by construction, today we will know how October was for the service sector.
In September, PMI for the largest UK sector was at 53.9 down from the 54.3 of August. The sector has performed quite well over summer thanks to the good weather. Moreover, last week some leaked news suggested that a UK-EU deal for the sector has been reached and this should bring some positivity. However, this might not impact in today’s PMI due to timing.
The ONS data extravaganza to end it
On Friday, we will be surrounded by a waterfall of data. Quarterly and monthly GDP, trade, manufacturing, construction, and service data for September will tell us how the economy is doing, but also how each sector is contributing to it.
GDP for Q3 is expected to grow by 0.5% /0.6%. This would be a very positive result after the meagre 0.1% in Q1 and the subdued (by recent historical standards) 0.4% in Q2. However, Q3 growth incorporates some seasonal and one off factors which we won’t see in the last quarter of the year. In particular July performance (+0.3% in the month) was particularly positive thanks to the World Cup and the hot weather which clearly helped the service sector but also construction and extractive activities.
On the expenditure side, we will also keep a close eye on business investment which has seen a very weak start of the year with the latest numbers down 0.2% in the year to Q2 for the whole economy and down 1.6% for manufacturing.
The ONS will also tell us how manufacturing performed in September and the entire Q3. After two consecutive negative growth periods (-0.1% in Q1 and -0.7% in Q2), manufacturing is expected to bounce back but not massively with an index of production (which also includes mining and utilities other than manufacturing) running more than the index of manufacturing.