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ECONOMIC DATA THIS WEEK

PMI, UK and Euro-zone, January 2013:  The Purchasing Managers Index (PMI) for the UK edged down slightly in January, but with a reading of 50.8 (51.2 for December 2012) it remains in positive territory. 

Output continued to expand, at its fastest rate since September 2011, following a further increase in new orders and a continuing reduction in order backlogs;  of some concern is that this growth in output  was mainly in the consumer goods sector, with capital goods output falling.  For orders, there was an improvement in domestic business, with export orders fell for the 13th month in a row, with the weakness in Europe the main cause.

This latter point is reflected in the fact that the PMI for the Euro-zone is firmly in negative territory at 47.9 (46.1 in December);  however, this is the highest figure for the Euro-zone in 11 months, so perhaps there are just signs of the situation easing a little.  This improvement is driven in part by the fact that the PMI for Germany was also at an 11 month high at 49.8, just a fraction below the 50 mark which divides growth from contraction.  Ireland and the Netherlands had indices that were just over 50, the index for Italy improved to a 10-month high of 47.8 and Spain had a 19-month high of 46.1, but there was a further fall in the PMI for France to 42.9.

Elsewhere in the world, the PMI for Russia was up to 52.0 and in Asia there is a mix of trends with India at 53.2 (although lower than in December), China up to 52.3, Taiwan up to 51.5, Korea broadly flat at 49.9 and only Japan firmly in negative territory at 47.7 (but this is up from the December figure of 45.0).  Time-zones mean that we don’t yet have any data for the USA or any of the other parts of the American continent.

All of the Markit PMI reports for major economies around the world are available from their web-site at http://www.markiteconomics.com/Survey/Page.mvc/PressReleases.

UK GDP, 4th Quarter 2012:  As we briefly reported last week, the Office for National Statistics (ONS) published the preliminary estimate for UK GDP in the final period of last year - this is based on about 45% of the data for this period.  Last year ended with a dip in UK GDP with the initial estimate being that it was -0.3% lower than in the 3rd quarter;  this gives a picture of no change in GDP between 2011 and 2012 for the full year.

As these are preliminary estimates, the details are sketchy, but there appears to have been a sharp fall in manufacturing output which fell by -1.5% compared to the previous quarter and was down by -2.0% for the year as a whole.  We will have to wait for the detailed figures which are published next week to see which parts of manufacturing were affected.  Elsewhere in the economy, construction output stabilised with a small increase being recorded in the final quarter, while the service sector overall was flat, although this hides a mixture of positive and negative movements within this large part of the UK economy.

Full details can be found in the ONS Statistical Bulletin which can be downloaded from their web-site at www.ons.gov.uk or requested from MTA.

European Sector Accounts, 3rd Quarter 2012:  Eurostat has published the detailed analysis of the European economy, showing a further fall in the gross investment rate of non-financial corporations for the EU27 to 19.6% (19.9% in the 2nd quarter) - this is its lowest level since the start of 2010.  For the Euro-zone, the rate was 19.9% (20.2% in Q2).

The report also highlights stability in the gross profit share in the EU;  for the EU27, this was 37.6% in the 3rd quarter (37.7% in the 2nd period of the year), with the Euro-zone at 38.0% (38.1% in Q2).

The Eurostat News Release on the European sector accounts is available on request from MTA.

CECIMO Statistical Toolbox, January 2013:  The latest edition of the CECIMO Toolbox contains the usual round-up of data on the European economy as a whole and continues to track MT-IX - CECIMO’s own index of share prices for publically quoted machine tool manufacturing companies.  The CECIMO Statistical Toolbox can be downloaded from their web-site at www.cecimo.eu or requested from the MTA - if you would like to receive this on a regular basis, please let us know and we will send it to you as it is published each month.