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Economic News

 The June edition of the MTA Business Survey is one of our slightly longer editions and comes at an opportune time as survey data points to an improvement in the sector, at least in the UK.  We would like to thank those of you who have already replied and invite those who haven’t to take part in this survey so that we get a good picture of the current situation in the manufacturing technology sector.  You can access the on-line form at;  even if you can’t (or would rather not) answer all the questions, you can still contribute towards the overall picture of the sector - please try to do this by Tuesday 9th July.


 PMI, UK and Euro-zone, June 2013:  The Purchasing Managers Index (PMI) for the UK is at a 25-month high level as rising demand supports faster output growth.  The levels of production and new business were at their highest since April 2011 and February 2011 respectively, driving the PMI to 52.5, up from a revised reading of 51.5 in May.  Incoming new orders rose for the 4th consecutive month and solid demand was reported from both the UK and a wide range of exports markets in Europe, China, North America and the Middle East.

 The report for the euro-zone shows an improvement in the business situation here as well, but while the PMI reading of 48.8 is the highest for 16 months, it is still below the crucial 50 level which divides expansion from contraction.  This positive news is strengthened by the fact that seven of the eight countries saw their PMI reading increase in June, but is then tempered again by the news that the exception was Germany.  Of the euro-zone 8 countries in the report, only Ireland (50.3) had a PMI above 50, although the Spanish figure was exactly at this threshold level.

 Elsewhere in the world, there is a mixed picture, with few clear trends even at a continental level.  Other European countries were generally better with an improved index in Russia, Poland and the Czech Republic, but Turkey was flat;  all of these were above 50, with the exception of Poland.  In Asia, the index in Japan rose to 52.3, but this was by far the best country with India at 50.3, while China, Taiwan and Korea were all below 50 - but Taiwan was much better than in May, while the other two had a falling index.  The PMI readings for the USA, Canada, Mexico and Brazil were all above 50, but with the exception of Brazil where it was unchanged, the figures were lower than in May.

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

 RationalFX Weekly Market Report:  Following the recent Members Quarterly Meeting, we are now receiving a weekly report on changes in exchange rates.  It has been an interesting week with some weakening of both the US$ and the euro and the pound having an interesting day on Thursday with first an appreciation in anticipation that the Bank of England would indicate that interest rates might rise, followed by a weakening when the new Governor announced that they had no such intention.  The process was then repeated shortly afterwards when the European Central Bank (ECB) made a similar announcement!  This was good news for share prices which moved up in reaction to the continuation of cheap borrowing.

In Europe, the coalition government in Portugal has seen both the finance and foreign ministers resign and bond yields there are now above 7% which is seen as unsustainable;  the reaction of the ECB is yet to be seen but it is to be hoped that this is not a re-run of the crisis in Cyprus.

 If you would like a copy of the full report and/or the daily currency outlook from Rational FX, please let us know and we will forward these to you.  More information on Rational FX is available at their web-site at

 UK Quarterly National Accounts, 1st Quarter 2013:  The main news to come out of the release of the detailed national accounts by the Office for National Statistics (ONS) was about the revisions to earlier data rather than the Q1 figures.  These were unrevised from the previous estimate and so showed growth of +0.3% compared to the 4th quarter of 2012 and make the economy +0.9% larger than it was a year earlier.

 Revisions to earlier data and moving the volume reference year from 2009 to 2010 mean that GDP growth between the 4th quarter of 2011 and the 1st quarter of 2012 is now estimated to have been flat (it was a fall of -0.1%).  In itself this is not a huge change, but it is very significant because it changes the sign in the middle of a run of three negative quarters and means that the UK did not have a double-dip recession.

You can get all the details of this in the ONS Statistical Bulletin which is available on their web-site at or on request from MTA.

CBI Industrial trends Survey, June 2013:  The latest report from the CBI survey notes that the UK manufacturing sector remains “subdued” in June.  Total and export order books were at about their long-run average levels and output was broadly flat on the situation 3 months earlier despite previous expectations of growth;  undeterred, firms still expect a modest pick-up in output over the coming 3 months.  This view is more pessimistic than the PMI data we highlighted earlier, so it will be interesting to see which direction the ONS manufacturing output data moves when it is published next week.

 The CBI News Release is available from their web=site at or on request from MTA.

 CECIMO Statistical Toolbox, June 2013:  The June edition of the CECIMO Toolbox is now available to download from their web=site at or on request from MTA (we can send this to you each month as it is published if you wish - just drop us a request at  This document highlights the latest trends, mainly at a macro-economic level, for Europe, but also includes CECIMO’s own tracking of share prices for publically quoted machine tool companies – MT-IX.