A new month has just started…
… So PMI data are going to be released in the next three days.
As always, the first appointment is on Monday with manufacturing PMI.
In July, PMI was down to 54.0 after the 54.3 registered in June. Activity has picked up a little since the flat performance in the first quarter and the big drop of the second one with a particular poor performance in April. As reported in our Manufacturing Outlook, sub-sectors are performing extremely differently with some booming (such as electronics) and some contracting heavily (such as electrical equipment). This is reflected in our forecasts for manufacturing sub-sectors and Martyn will blog about that on Wednesday.
Since the end of 2017 manufacturing activity has trended down (in the UK but also all over Europe) and we expect this trend to continue, however no sharp contraction should be in sight.
Construction is trending up
On Tuesday will be the turn of construction PMI. After a poor second half of 2017 and a very difficult start of the year (Carillion collapse and extreme weather conditions), the sector is trending up. Last month PMI was up at 55.8 from the 53.1 registered in July. The result was the best since May 2017 and, in terms of GDP, the sector grew by 0.8% in the second quarter.
The revived construction activity should help manufacturing related to it such as rubber & plastics, electrical equipment and non-metallic minerals.
Services stable but not strong
The three days of PMI releases will be completed by the service PMI on Wednesday.
The last PMI was down to 53.5 from the 55.1 of June. In general since the EU referendum, service’s scores have wobbled up and down around the 54 mark.
The result is clearly positive (as a reminder 50 is the threshold between expansion and contraction), however the result is far from the heights of the period between 2013 and 2015 when PMI was trending close to the 60 mark. As a result official data for services and, consequently, private consumption are still positive but not as strong as they used to be.