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Summary of November PMI Markit/CIPS releases

07 Dec 2015

The forward-looking and well-regarded Markit/CIPS PMI (Purchasing Managers' Indices) have just been released, painting a picture of the UK economy which is healthy overall, but with some softer spots

Services are performing strongest (approx 78% of UK GDP), with this index rising to a four month high of 55.9 (values over 50 indicate expansion). Although some respondents reported rising wages due to difficulties hiring suitable new staff, this is being offset by falling oil and energy costs, keeping a lid on inflationary pressures. This presents a picture of the UK currently enjoying solid economic growth and low inflation - November was the 35th consecutive month of new business growth. Service providers remain optimistic that activity would rise over the next twelve months, but the strength of this sentiment was roughly the same as October's two-and-a-half year low

Manufacturing expanded in November (approx 13% of GDP) recording an index of 52.7 - a modest gain. Both input costs and selling prices fell, with falling global commodity input prices being passed on by manufacturers to customers, to keep their competitiveness. As with October, the expansion is mainly concentrated in large companies, with small and medium companies not currently enjoying the gains

Construction (approx 7% of GDP) output growth slowed in November, primarily due to the weakest rise in residential housing activity since June 2013. Jobs growth eased to its slowest since September 2013. It seems that housebuilders have become more cautious, especially in regards to hiring new staff. On the upside, UK construction firms were overwhelmingly positive about activity over the next twelve months, with only a small proportion of companies expecting falling output levels.

The PMI data from Markit/CIPS are highly regarded as reliable forward-looking data. The data is compiled from responses from companies' Purchasing Managers, and are based on hard facts, not opinion, on what is happening at 'grass roots' level in the economy

For the actual releases click here:

Services

Manufacturing

Construction

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