This week our focus will be mainly on the PMI releases.
On Thursday the Purchasing Managers’ Index will give us an indication if the start of 2018 will be as bright as the end of 2017 for manufacturers. Recent months have seen strong PMI data followed by strong “hard data”. The first GDP reading for the last quarter of the year confirmed that the sector is in a good shape. In the last quarter of last year manufacturing expanded by 1.3% completing the year with an annual growth of 2.7%. The last PMI release for the year show that the expansion should not be over yet (56.3) even if the index was slightly down from November (58.2).
On Friday, construction PMI will be released and it will be the first release after the shocking news about Carillion. The sector is experiencing an extremely difficult moment with a prolonged period of contraction following a booming start of 2017. The latest GDP release showed how construction has contracted by 1% in the last quarter of the past year and it is becoming apparent how this sector has been the mostly affected by Brexit uncertainty. On a positive note, the latest PMI release showed some sign of recovery with the index over 50 points (52.2)