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Economic data this week

PMI, UK and Euro-zone, December 2013:  The Purchasing Managers Index (PMI) for the UK ended the year at 57.3;  although down slightly on November, this still represents a strong indication of expansion in the sector and the average for the quarter as a whole was at its highest since the start of 2011.  Production and new orders continued to expand at rates which are close to the highest seen in the 22-year history of the survey and this was reflected in the 8th successive monthly increase in employment.

In the euro-zone, the overall index increased to 52.7, its highest level for 31 months, with rising output and fuller order books encouraging manufacturers to hold off from further job cuts.  Among the individual countries, Netherlands, Germany, Italy and Greece all recorded their highest levels for around 2½ years and Spain was back above 50;  although the index in Austria and Ireland dipped, they were both significantly positive.  The one concern is France where the PMI fell to 47.0, its lowest level for 7 months and the 22nd consecutive contraction in activity.

Elsewhere in the world, the only major economies with a reading below 50 was Russia (48.8) and the general trend elsewhere was for either an index just above 50 (China, Korea, India and Brazil) or a stronger positive - these ranged from 52.6 in Mexico up to 55.2 in Japan and Taiwan with Czech Republic, Turkey, Poland, Canada and the USA between these two points.

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

UK Manufacturing Output, November 2013:  The latest figures for manufacturing output from the Office for National Statistics (ONS) are also generally positive, confirming some of the trends identified by the PMI numbers.  Total manufacturing output in the latest 3 months (September, October and November 2013) was +0.6% higher than in the previous 3 months (June, July and August) and +2.0% above the level of the same period a year earlier (September, October and November 2012).

Among the major industrial groupings, only Capital Goods (+1.1%) and Intermediate Goods (+1.8%) saw growth compared to the previous 3 months, but all of the sectors except Consumer Durables had output higher than a year earlier, with Capital Goods leading the way with growth of +3.7%.

At the industry level, the divergence in performance that we have seen during 2013 has continued.  Output of Motor Vehicles in the latest 3 month period was +4.4% higher than in the previous 3 months and +16.9% above the level a year earlier;  Aerospace output increased by +2.7% and +11.6% respectively.  We had thought that a change might be emerging in the Metal Products sector where output was +3.9% higher than in the previous 3 months, but the November figure itself was weaker, so we still need to wait for the real trend to emerge.  Output of the Machinery sector was +1.4% higher than in the previous 3 months, but still -6.3% lower than a year earlier.

You can download the ONS Statistics Bulletin and the full dataset from their web-site at or request it from MTA;  we can help you find your way around this dataset - contact Geoff Noon (

Profitability of UK Companies, 3rd quarter 2013:  Data from the ONS shows an increase in the net rate of return for manufacturing companies to 9.5%;  this compares to a rate of 7.9% in the 2nd quarter of the year and 7.4% in the 3rd quarter of 2012 and it matches the rate recorded in the final period of 2012.  The rate of return is the ratio of operating surpluses compared to capital employed.

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

Bank of England Agents Summary of Business Conditions, December 2013:  The summary of the Bank’s Agents input to the Monetary Policy Committee was published on Christmas Eve;  this is based on the Agents discussions with contacts mainly during November.  It showed a small improvement in manufacturing output for the domestic market but with no change in the growth rate for manufacturing exports.  Investment intentions continued to point to modest growth in capital spending over the next 12 months.

During October and November, the Agents asked some extra questions about capacity utilisation and how they had reacted in the past year or would react to a future increase in demand for their products.  Of those who have seen a rise in activity, most had responded by improving productivity in various ways, although there was also a significant percentage who had expanded capacity either by increasing employment, longer working hours or extra plant and equipment.  There was a similar response to the forward looking question, although the percentages of respondents who would take on more staff and/or increase working hours was higher in this case.

You can download the summary report from the Bank of England web-site at or request it from MTA.