After manufacturing, this week it’s the turn of construction and service PMI
On Friday, May’s manufacturing PMI bounced back to 54.4 after the 17-months low registered in April. The reading was clearly positive and well above the 50 threshold, however when looking at the details the picture is not concern-free.
According to Markit-IHS, the pick-up was mainly due to an important build-up of goods for inventories and to a reduction of work backlogs.
Moving to construction, April’s reading saw a positive bounce to 52.5 after the 47 registered in March. The sector has contracted by 2.7% in the first quarter of the year when compared to last quarter of 2017. The bad performance was related to some short-term effects, such as weather and the collapse of Carillion, but also some structural problems which have characterized the sector since the second quarter of 2017.
On Tuesday will be the turn of service PMI. Last month the reading was at 52.8, up from 51.7 of March when some sectors such as retail and food & accommodation had to deal with the negative effect of the bad weather (even if it had a positive effect on online retail sales).
The sector, which accounts for roughly 79% of the economy expanded by 0.26% in the first quarter of 2018, a quite weak performance for its standards.
Later on, you will also find Lee’s blog about Manufacturing Outlook on this page.