This week’s data releases will be dominated by September’s trio of PMIs – manufacturing, construction and services.
August’s manufacturing PMI came in at 56.9 in August, a 4 month high and the second strongest reading in over three years. Once again, strong positive demand from key export markets was broadly behind the impressive performance, particularly in the Eurozone, where growth continues to be healthy. The sector is also benefiting from the weak level of sterling and the supportive boost this is providing for exports. With other data points, notably manufacturing production which expanded by 0.5% in July, and our own Manufacturing Outlook survey pointing to momentum being maintained in the sector, we expect another strong reading when the data is released this morning.
Services and Construction PMI
The construction and services PMI will be out on Tuesday and Wednesday respectively. The construction PMI disappointed last month, falling to a one year low amidst an investment slump in the commercial sector. We expect to see a bit of a rebound this month, as new work from major projects begins to be reflected in the data. Services meanwhile has been largely stable over the last 4 months, hovering between the 53-54 mark. We expect this trend to continue, despite the slightly disappointing services output data which came out last Friday.