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ECONOMIC DATA THIS WEEK

PMI, UK and Euro-zone, May 2013:  The Purchasing Managers Index (PMI) for the UK was 51.3 in May, up from a revised figure of 50.2 for April;  the revision is interesting because although it is relatively small, it took the index from below the key level of 50 (at 49.8) to a point just above the border between growth and contraction.

The May figure provides support for a view that the Spring of 2013 is a turning point in the cycle for the UK manufacturing sector.  In particular, the growth in manufacturing output was spread across the major sub-sectors and this was accompanied by a continued improvement in incoming orders, led by the domestic market, but also shared with export business, especially from North America, East Asia, Russia, Germany and France.

The report for the euro-zone is also encouraging, although the overall index remains in negative territory at 48.3 in May.  However, this is a 15-month high for the index, although it remains in a run of 22 consecutive months below the 50 level.  All of the 7 countries which are included in the report saw an improvement in the index compared to their April figures, but Germany was the “best” at 49.4 and although it is a 13-month high, the PMI of 46.4 for France was the 2nd worst in the survey (ahead of only Greece) and still at quite a weak level.

Elsewhere in the world, most of the major Asian countries saw the index falling in May and for two of them - Taiwan (47.1) and China (49.2) - it fell below the 50 level;  the exception in this part of the world was Japan where the index was marginally higher than in April at 51.1.  In the Americas, the indices for the USA, Canada, Mexico and Brazil were all above 50 with the two mostly northerly of these seeing and improving index, while it edged down in Brazil.  In the rest of Europe there is a mixed picture - Russia was fractionally down at 50.4 with Turkey seeing a similar trend in its index of 51.1, while both the Czech Republic (50.1) and Poland (48.0) were significantly better than in April.

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.