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PMI, UK and Euro-zone, January 2018:  The Purchasing Managers Index (PMI) for the UK manufacturing sector moved down to its lowest level since July 2017, but with the reading at 55.6, it still implies a significant rate of expansion of activity in the sector and is a long way above the long-run average.  The PMI is a composite index of 5 measures of activity and part of the reason for the lower figure is an acceleration of input costs.  However, there was also slower, but still solid, growth in both output and new order intake.  Perhaps most importantly for us, the Markit News Release notes that expansion of both orders and output was strongest in the investment goods sector where most of our customers are classified.

In the Euro-zone, the PMI reading also began the year strongly at 59.6, even if this was slightly down from the near record levels seen the previous month;  this extended the run of positive (above 50) readings to 55 months.  Although consumer goods was the only sector to see growth accelerate, it remains the weakest of the 3 main groupings within manufacturing and, like the UK, investment goods are leading the way in Europe.  Italy saw the most significant improvement on what was already a decent rate of growth and there was also an improvement in the Netherlands which set a new all-time record.  The largest falls compared to December 2017 were in Austria and Germany, but with PMI readings of 61.3 and 61.1 manufacturing sector growth in these countries remains very strong.

Elsewhere, the PMI readings for both South Korea and the ASEAN region edged above 50 so January was another month where all of the 25 countries and two regions that we track each month were in positive territory.  A majority of the “other” countries improved their PMI reading compared to December 2017, with Canada seeing the largest increase to reach 55.9;  the strongest PMI readings in this group were in Switzerland (65.3, down from 65.6 in December) and Hungary (60.9 from 60.5), while the most significant declines were in Sweden (down by 3.4 points to 57.0) and India (down 2.3 to 52.4).

The 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 -

European GDP, 4th Quarter 2017:  Following the UK data last week, Eurostat has issued a preliminary flash estimate which shows that quarter-on-quarter growth for both the Euro-zone and the EU28 was +0.6% - this matches the UK trend.  However, for the year overall, GDP growth was +2.5% for both areas, ahead of the UK’s trend (+1.8%) for the first time since 2011.

There is no geographical detail in this report - this comes in a couple of weeks’ time + but it is likely to show that the key European economies are growing faster than the UK.  You can download the Eurostat News release from their web-site at or request it from MTA.

BEAMA Contract Price Adjustment Service:  Do you have long-term contracts, either with customers or suppliers?  Have you thought about incorporating something in the contract that allows you to adjust the price according to changes in input costs?

On behalf of members, MTA subscribe to a service provided by our colleagues at BEAMA which gives a monthly track of key indices on labour and materials costs.  Of course, you need to get the principle and the relevant formulas included in the contract, but this gives you a way of updating the relevant prices independently.

If you would like more details on this, please contact Geoff Noon ( at MTA;  we can send you a copy of the latest report and some typical formulae and can have a discussion about whether or not this would be useful for you.