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Economic Data this week

PMI, UK and Euro-zone, December 2014:  The Purchasing Managers Index (PMI) for the UK edged down to a 3-month low of 52.5 in December but, at the risk of sounding like a stuck record, we need to highlight again that this is still pointing to a reasonable rate of growth for the sector.  The growth rates for both production and new orders both slowed, but the unbroken run of positive figures was extended to 22 months for both of these sub-series.  The growth was fairly evenly spread across the sub-sectors of investment, intermediate and consumer goods.  New orders growth remains mainly in the domestic market, although there were reports of improved export demand from North America and the Middle East, but the euro-zone picture was more mixed with some up and others down.

This brings us neatly to the euro-zone where the PMI was 50.6, slightly up on the November level of 50.1, in part because Germany moved back into positive territory at 51.2 having dipped below the 50 level in November.  Overall, December saw the slowest output growth rate for 18 months, but the was a small improvement in new orders with the trend for export business (including intra-euro-zone trading) providing a positive contribution to total new orders.  Although Germany was back in positive territory and Spain and Netherlands continue to expand at a good pace, France (the weakest country in December at 47.5), Italy and Austria are below the crucial 50 level.

Elsewhere in the world, there is a mixed picture, but the most common position is a moderately positive figure.  For example, in the Americas, Canada and the USA are t 53.9 and Mexico is at 55.3 (making it the second strongest country in December behind Ireland which is at 56.9), but the reading for Brazil is only just in positive territory at 50.2.  The main weakness at the moment is in Asia where China (49.6) and South Korea (49.9) are just below the dividing point between expansion and contraction and Taiwan is exactly on it at 50.0;  there is some growth in Japan which is at 52.0 and India is strong with a PMI of 54.5.  Finally, back in Europe, there is modest growth in the Czech Republic (53.3), Poland (52.8) and Turkey (51.4), but Russia has slipped to 48.9.

All of the Markit PMI reports for major economies around the world are available from their web-site at

UK Quarterly National Accounts, 3rd Quarter 2014:  Just before the Christmas break, the Office for National Statistics (ONS) released the detailed figures for the UK economy which included some extensive revisions to data over the past couple of years.  As a result, although the quarter-on-quarter rate was unchanged from the previous estimate at +0.7%, the annualised growth rate has been cut to 2.6% (from +3.0%).  The main downward revisions were in the 3rd quarter of 2013 and both the 2nd and 3rd quarter of 2014, with an upward revision for the 2nd quarter of 2013, with the changes mainly concentrated in the gross operating surplus of corporations, net trade (where imports are revised up much more than exports), changes in inventories (not Q3-14) and in general government spending (mainly in Q3-14).

You can get the ONS Statistical Bulletin from their web-site at or request it from MTA.

UK Business Investment, 3rd Quarter 2014:  Revised figures form the ONS released just before Christmas show that total business investment was -1.4% lower than in the 2nd quarter of the year, but was +5.2% higher than a year earlier.  The downward revision to the quarter-on-quarter growth figure was mainly in the buildings sector, but there was also an upwards revision to the Q2 figure for spending on transport equipment.

Total manufacturing investment was +1.9% higher than in the previous quarter and +4.1% above the level of the 3rd quarter of 2013 (seasonally adjusted volume data);  within the total, capital expenditure by the Engineering and Vehicles was +3.2% up on the previous quarter and +0.5% higher than a year earlier.  Another breakdown is by type of asset;  spending on Other Capital Equipment (which excludes new buildings and vehicles) was +2.3% up on the previous quarter and +1.6% higher than a year earlier.

You can get the ONS Statistical Bulletin and access the more detailed data files from their web-site at or request it from MTA.

CBI Industrial Trends Survey, December 2014:  The results of the latest CBI survey show a stabilisation of the manufacturing sector at the end of last year;  total order books remained well above average and headline output growth held steady.

The strength of total order books was broadly based with 13 of the 18 sub-sectors reporting them to be above average;  on the down side, although export order books improved a little, they remain weaker than total orders.  Growth in output volumes has been broadly steady since August 2014 and is expected to continue at a similar pace in the coming 3 months.  Although only 12 of the 18 sectors reported an increase in output in December (down from 15 in the November survey), the report notes that Motor Vehicles and Transport Equipment, along with plastic products, were the largest contributors to growth.