The focus this week will be on the trifecta of manufacturing, services and construction PMIs:
The trifecta of PMIs
On Wednesday, the release of manufacturing survey data will kick off the series of PMI releases, with the services and construction PMIs to follow on Thursday and Friday respectively. These releases should help take the temperature of the UK economy in February.
Our focus will be on the manufacturing release, where we expect another strong showing for the sector. The pick up in global manufacturing activity and a still supportive UK domestic demand environment should continue to push through output increases in the sector. In January, the manufacturing PMI tailed off slightly to 55.9 from 56.1 in December – the highest level in almost three years. We expect activity levels to remain well above their long term average of 52.5, with the PMI index coming in at around 56.
Accounting for almost 80% of UK GDP, the services PMI release on Thursday will be watched with interest. The Services PMI posted 54.5 in January from 56.2 in December 2016, prompting fears of an impending slowdown in the services industry. This week’s release will give as a good indication about whether these fears are well founded or not.