We’re in for a relatively data-lite week. Last week we saw PMIs for July which point to the third quarter starting much as the second one finished. And on Thursday we see confirmation of industrial production growth in June and some new monthly trade figures.
Manufacturing output data has been disappointing of late with the first estimate of GDP, released at the end of last month, indicating a contraction of 0.5% in the three months to June. There are a couple of things we already know ahead of the release – the first is that most of the weakness stems from the auto sector, where output shrank by over 6% - we explained why here. The figure for June should indicate that there were some output gains across manufacturing in June. If output expands, as we expect, this would be a bit more consistent with the more upbeat PMIs.
As for trade, there seem to have been a bit more alignment between the official data on manufacturing exports and the survey data (see the PMI and EEF’s Manufacturing Outlook). Exports of manufactured goods have increased in each quarter since the start of 2016, and we don’t foresee that changing in the 2017q2. We continue to suck in imports, of all goods, at a similar pace leaving the trade balance little changed so far this year.
We’ll be blogging on developments in both later this week.