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Economic Data

PMI, UK and Euro-zone, December 2018:  The UK manufacturing Purchasing Managers Index (PMI) improved again to stand at 54.2 at the end of 2018;  this was the highest reading in the 2nd half of the year, although the quarterly average was the weakest since Q3-2016 because of the low (but still positive) PMI in October.  The improvement in December was mainly driven by new orders and stocks of purchases with IHS Markit (the organisation that compiles the PMI) reflecting that both of these elements were helped by Brexit preparations by both manufacturers and their clients.

The Euro-zone saw its manufacturing PMI reading fall in December to 51.8;  this extends the current run of positive (over 50) readings to 5½ years although this level is the lowest since February 2016.  Of the 8 countries covered, only Netherlands (57.2) and Italy (49.2) saw an improved reading compared to November and the latter was joined in negative territory by France (49.7) with Spain (51.1) and Germany (51.5) also having relatively low PMI readings.  At a sector level for the Euro-zone, there was marginal growth in the capital goods sector, with growth in the consumer goods sector outweighed by weakness for intermediate goods.

Elsewhere in the world, the majority of the countries that we monitor showed a lower reading for their PMI in December.  The most prominent exception was South Korea, but a significant increase could not move it out of negative territory and the PMI was only 49.7;  the other countries with improvements were Hungary (54.2), Japan (52.4) and Switzerland (57.8), while the PMI of Mexico was unchanged (and still negative) compared to November (49.7).  December also saw the Czech Republic and China slip below the crucial 50 level, while Taiwan, Turkey and Poland all saw their PMI for manufacturing slip further into negative territory.

The IHS Markit PMI reports for major economies around the world are available from their web-site at or we have a summary report of charts which is available from MTA (contact Geoff Noon -

UK National Accounts, 3rd Quarter 2017:  The Office for National Statistics published the UK National Accounts for the 2nd quarter just before the Christmas break.  The main headline was the confirmation that the UK economy grew by +0.6% compared to the previous quarter - this is unrevised from the previous estimate, but the annualised rate has been revised up to +1.8% (from +1.7%) thanks mainly to a revision to the data for Q3-17.

Almost inevitably given its size, the Service sector made the largest contribution to growth, but Construction was the fastest growing of the sectors with a quarter-on-quarter expansion of +2.3%, its fastest rate since the 1st period of 2016.  As we have reported previously, Manufacturing grew by +0.4%, thereby ending the recession (two consecutive negative quarterly trends) in this sector that we saw in the first half of the year.

You can download the ONS Statistical Bulletins from their web-site at (21 December) or request them from MTA.

UK Business Investment, 3rd Quarter 2017:  As part of the National Accounts data package, the ONS also published revised data for investment and the detailed industry breakdown.  Total business investment at 2016 prices fell by -1.1% compare to the previous quarter and is -1.8% lower than in the 3rd period of 2017;  the rolling annual trend is still positive at +0.6%, but the peak quarter was at the end of 2017, so the full year figures for 2018 are likely to be negative.

The manufacturing sector had a better quarter with an increase in investment spending of +4.5% compared to the 2nd period of the year, but this was -1.9% lower than a year earlier (all this data is seasonally adjusted);  the annualised rate of growth for manufacturing was +2.6%.  Within this, the Engineering & Vehicles industries (which account for more than 40% of total manufacturing investment) saw spending register a quarter-on-quarter increase of +6.6%, but this hides the fact that 2018 has generally been a weak year and the Q3-18 figure was -8.6% lower than a year earlier;  with a peak here in Q4-17, the annualised rate was still positive at +1.2%, but we still expect a negative outcome for 2018 as a whole.

You can download the ONS Statistical Bulletin from their web-site at (21 December) or request it from MTA.