Here’s a Monday morning look ahead at the data and events relating to UK manufacturing. Some crucial events are set take place this week with the Chancellor announcing the Budget on Wednesday and make-or-break negotiations resuming between Eurozone officials and Greece:
Index of production
Index of Production figures for May are set to be published on Wednesday. The manufacturing PMI came on the weak side last week – dropping to 51.4 in June from 52.2 in May – indicating a near stalling in manufacturing output for Q2. We do not expect Official Statistics to show strong growth in the manufacturing IoP this month either. Still, given a weak Q1 it is likely that even with subdued growth in May and June, manufacturing output will grow slightly in Q2.
All eyes will be on the Chancellor on Wednesday as he announces his Emergency Budget. The Budget should involve the usual cocktail of fiscal consolidation and targeted tax cuts. Indications are that the Government will also issue a report on productivity aiming to tackle the UK’s ‘productivity conundrum’. EEF’s own productivity report shows that there is no ‘conundrum’ when it comes to manufacturing; the sector is considerably more productive than the whole economy average.
With the Greek public voting a resounding ‘NO’ in yesterday’s referendum painstaking negotiations between the creditors and the Greek government are set to resume this week. And they will resume without Greek Finance Minister Yanis Varoufakis who resigned this morning to smooth out negotiations in the Eurogroup. The ‘NO’ vote brings more uncertainty and all bets are off regarding the final outcome.