Manufacturing PMI soars

I don’t attribute a great deal to PMI surveys. I always thought the immediate post Brexit ones were jaundiced by the views of senior business people who did not like the result of the referendum and who expressed their disappointment rather than providing an independent view of what was going to happen in the economy. This month they have corrected for the pessimism of last month. I will still prefer to stress the actual numbers for output and incomes, which have been fine so far this year.

I just hope the Bank of England and the other commentators who put a lot of store by the negative numbers last month will put equal store by the very positive numbers this month! I look forward to their revisions of outlook based on these surveys that they like so much.

 

(The manufacturing PMI rose by 5.0 points, a record rise, to take it well into positive territory)

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31 Comments

  1. Beecee
    Posted September 1, 2016 at 11:09 am | Permalink

    It is a pity that Mark ‘Carnage’ Carney is still being allowed to wreak his ire on those who refused to accept his prophecy of Brexit doom.

    It is and was clear that the economy neither needed the interest cut nor the injection of yet more cheap money for the banks.

    At a stroke he has driven the final nail into the coffins of those who are trying to save for their and their children’s futures.

    • Sir Joe Soap
      Posted September 1, 2016 at 4:31 pm | Permalink

      Indeed, another nail in the coffin of final salary pensions, too. With this one move on one day, Carney probably did more net damage to pensions than Philip Green ever did.

  2. Denis Cooper
    Posted September 1, 2016 at 11:39 am | Permalink

    We have to see how it goes over the coming years, once the Article 50 notice has gone in so nobody can any longer harbour serious doubt that we will actually leave the EU, and the negotiations have taken place and so we know the basics of the new arrangements. There can still be many a slip between cup and lip … but I’m confident that in a decade or two few people will be yearning for the good old days when we were in the EU, nowhere near as many as those who have been yearning to reverse the mistake of joining it.

  3. Richard Butler
    Posted September 1, 2016 at 11:40 am | Permalink

    Joint largest surge in 25 years.

    To help combat the relentless assertion the Leave win was a result of lies fed to the thicker halve of the populace, here are just some of the Remain lies and manipulations I have compiled;

    The central Treasury forecast was for a ‘brief shallow recession’, but the entire Remain establishment told us we’d be putting a bomb under our economy

    Camerons £4300 cut to every household was said to be a ‘gross misreprentation’ by the Treasury Select Committee

    Cameron promised future immigration cuts and maintained the ‘tens of thousands’ ambition, but Treasury economic forecasts out to 2030 assumed current immigration levels.
    Cameron 2012 in Turkey – ‘I remain your greatest possible advocate’. 2016 – ‘Turkey wont be joining for a thousand years’.

    Osborn said house prices would fall 28% – failing to mention the BOE could reduce interest rates to avoid this and indeed prices are now going up again

    Osborn said there would be an immediate interest rate hike, yet they’ve now fallen
    Osborn threatened a pension cut yet the triple lock prevents this!

    Osborn ordered The Treasury to consider negative only spectrum outcomes that assumed no trade deal with EU or anyone else!

    Osborn promised an immediate emergency budget & tax rises

    Obama – told us we’d go to the back of an imaginary ‘queue’ failing to mention US /EU trade deals had failed over years.
    Clegg told us cross border co-operation on the environment and security are ONLY possible within the EU, failing to mention examples such as the Australia / EU security and sharing agreement 2015

    Establishment economists with a liberal academic bent piled myth upon myth, and promised immediate chaos. All nonsense informed by raw emotion and status quo bias

    BOE made no mention of the economic weapons at it’s disposal in order to down-play the effects of any turbulence. Following Brexit they deployed those weapons of course.
    BANKS – said Brexit would be a mistake, then shortly after the vote met in London with Osborn to assert their full confidence in London. Same Banks said they’d leave when we exited ERM and if we did not join the Euro. Same scare tactics used when Switzerland and Norway had referendums.

    RYANAIR–O’Leary toured the media circuit with news low cost airlines would become a thing of the past (I SAW MANY FACEBOOK COMMENTS THAT THIS WAS A PRIME REMAINERS CONCERN). On August 30th Jet2 announce 1000 new UK jobs and new routes

    U-TURNS -following the vote from many firms such as Siemens

    Sterling devaluation was recommended by the IMF for months prior to the vote, yet Remain never mention this

  4. JohnF
    Posted September 1, 2016 at 12:09 pm | Permalink

    Yep – I think I may have to apologise for contesting your view on the state of the economy.

  5. alan jutson
    Posted September 1, 2016 at 12:14 pm | Permalink

    The BBC as usual this afternoon had to get in the following comment on its lunchtime news:

    The increase in production this month is welcomed after the Brexit Slump, just to confirm they were right for a short time, even if they were not.

    Quite shameful really how this organisation wants to talk this Country down most of the time.

    • ian wragg
      Posted September 1, 2016 at 5:00 pm | Permalink

      and it broke the newscasters heart to acknowledge that the £ had risen against the $ on the news. Did not fit the narrative.

  6. CHRISTOPHER HOUSTON
    Posted September 1, 2016 at 12:15 pm | Permalink

    The BBC has discounted the good news on Manufacturing PMI . It says manufacturing only accounts for 10% of the UK economy. Far more interesting and indicative, they say , will be the Services PMI announcing monday.

    Senior business people took a jaundiced view because of their mardiness of the referendum result. But like all the “buts” of the BBC, they are being traditional British for all that.

    I told an old joke nearly half a century ago to a foreign policeman.I needed to give some explanation/excuse as to why we British can be so critical. I said it is within our British stereotype to criticise absolutely everything. I told the story of how 7 Brits sat around a table and were presented with the Koh-i-Noor diamond. Each looked intensely in admiration at its splendour . “Oh it’s so beautiful!”, remarked one. “Fantastic!” said another. “Glorious!” they said in chorus. Then one of the 7 miserably added: ” Yes, but it’s a bit big to fit on a ring” . Yes, they all sighed regretfully.

    Typical British. At least the foreign policeman laughed. Self-deprecation is also typically British. Hard for a foreigner to appreciate. Being British is a good thing. But you can have too much of a good thing. The BBC needs switching off.

    • Bob
      Posted September 1, 2016 at 8:59 pm | Permalink

      @CHRISTOPHER HOUSTON

      ” The BBC needs switching off.”

      At the very least the licence fee system should be phased out.

      They’re going to be sending out spy vehicles to monitor domestic wifi routers in case anyone accesses iPlayer without a licence.

    • Lifelogic
      Posted September 2, 2016 at 8:44 am | Permalink

      The BBC is quite simply wrong on every major issue, just like the Libdems and Cameron. They are pro EU, pro Climate alarmism, pro anything PC, pro enforced “equality”, anti car/plane/truck, pro bike/train/bus, pro “renewables”, pro magic money tree economics, for ever more red tape, ever more taxes and ever more government. They are dim art graduates in general, luvvies and and largely innumerate and certainly lack a sound grasp of real science and engineering.

  7. ian
    Posted September 1, 2016 at 12:19 pm | Permalink

    You may be sticking to your 2% growth so i will stick to my 1.6% growth, we will see after the usa election with 5 months to go till march.

    I see that the health minster still trying to fined cut in the health budget to give to PFI bankers with your new leader now joining in.

    • Ronald Olden
      Posted September 2, 2016 at 8:42 am | Permalink

      No ‘cuts’ are being sought in the Health Budget. The NHS England Budget is to rise from £116 Billion in 2015-16 to £133 Billion in 2020-21. ‘Efficiency Savings’ are being sought in the hope that we might actually get something for all that extra money for a change. Let’s see how hat goes.

      It’s not clear what is meant by ‘giving money to PFI Bankers’. The PFI contracts are already in place so the contractors are entitled to the money the Government has contracted to pay them. John Redwood in one of his Diary Posts has suggested that it might be a good idea to buy out these contracts and put Labour’s PFI behind us. I agree with him.

      They can be bought out for a cost to the taxpayer of next to nothing because the Government can borrow at such low interest rates.

  8. william
    Posted September 1, 2016 at 1:22 pm | Permalink

    Surely, the MPC should reverse its decision, taken in panic, to halve base rate. We need to calm the overblown housing market, and have a firmer sterling to ward off imported inflation.

    Reply I opposed their decision at the time and think they should reconsider in the light of recent figures

    • ian wragg
      Posted September 1, 2016 at 5:02 pm | Permalink

      Not likely to happen with the wrecker (Carney ed) in charge. Why hasn’t May shown him the exit.

      • Lifelogic
        Posted September 1, 2016 at 7:44 pm | Permalink

        Why indeed? His behavior in the run up to the election was a total outrage.

  9. Lifelogic
    Posted September 1, 2016 at 2:57 pm | Permalink

    The BBC only really give considerable publicity to reports that essentially fit with their idiotic, anti-scientific & preset agenda. This agenda as we surely all know is wrong on nearly every issue:- the EU, climate alarmism, the fake “equality” & “discrimination” agenda the EU, their desire for ever more regulation of everything, their attacks on landlords and businesses, their desire for ever more taxes, ever more licence fees, ever more government “investment” in everything, ever more magic money tree economics, ever more pointless, expensive and unreliable “renewable” energy white elephants, ever more bikes and trains and the rest of their bonkers, Luddite Libdim, Luvvie’s agenda.

    I do not expect much coverage of this survey.

    • Bob
      Posted September 1, 2016 at 9:12 pm | Permalink

      @lifelogic

      “BBC only really give considerable publicity to reports that essentially fit with their idiotic, anti-scientific & preset agenda.”

      Definitely nothing scientific about the BBC, it’s a huge political brainwashing operation.

      On R4 Toady this morning they reported that people felt they had not been given sufficient factual information about the EU.

      Remind me, whose specific purpose is to “inform, educate and entertain”?

  10. acorn
    Posted September 1, 2016 at 3:01 pm | Permalink

    As I said previously on this site.

    “This report shows without a shadow of a doubt just how dire the EU referendum debate really was,” said Katie Ghose, Chief Executive of the society. “There were glaring democratic deficiencies in the run-up to the vote, with the public feeling totally ill-informed.” http://uk.reuters.com/article/uk-britain-eu-referendum-idUKKCN1174HH

  11. margaret
    Posted September 1, 2016 at 3:14 pm | Permalink

    I just wish the base rate would go back up

    • Lindsay McDougall
      Posted September 5, 2016 at 2:03 pm | Permalink

      That would involve the pro-EU Governor Carney admitting that he was wrong, very wrong. It’s unlikely to happen until there is a purge of pro-EU Conservative cabinet members and VIPs.

      Eurosceptics should occupy most cabinet posts, particularly the four chief offices of State – PM, Foreign Secretary, Chancellor and Home Secretary. At the moment, they hold only one.

      Mr Redwood, are you happy that two thirds of the cabinet voted Remain? I’m not.

  12. Don Dutta
    Posted September 1, 2016 at 3:22 pm | Permalink

    Great news on upward surge of PMI. Sterling has also made some recovery against the US Dollar. Sincerely hope BoE plays this out positively.

    • Bob
      Posted September 1, 2016 at 9:18 pm | Permalink

      @Don Dutta

      “Sincerely hope BoE plays this out positively.”

      They need to ditch Carney ASAP. He’s using our money to depress the pound and sow the seeds of doubt in a desperate effort to salvage whatever credibility he may have once had.

  13. Denis Cooper
    Posted September 1, 2016 at 3:41 pm | Permalink

    Off topic, this is quite amusing:

    http://order-order.com/2016/09/01/remainer-split-coming-over-free-movement/

    “Remainers split over freedom of movement”

    The problem now is that nobody really knows what would be meant by Remain …

  14. Denis Cooper
    Posted September 1, 2016 at 4:58 pm | Permalink

    I’ve just seen the Deputy Prime Minister (?) of Poland on Sky suggesting that we should consider staying in the EEA, it would be good apparently. It’s quite heart-warming to find that we have friends in the EU who are willing to help us decide what to do when we leave, and without any obvious ulterior motive.

    • James Munroe
      Posted September 1, 2016 at 6:11 pm | Permalink

      Hasn’t Poland sent the highest number of migrants to other EU countries in recent years?

      Doesn’t being a member of the EEA mean that the UK must continue to accept Freedom of Movement of People from all the EU.

      If the above is true, I would suggest Poland does have an “ulterior motive”.

    • Denis Cooper
      Posted September 1, 2016 at 6:21 pm | Permalink

      http://www.efta.int/eea/policy-areas/persons

      “The free movement of persons is one of the core rights guaranteed in the European Economic Area (EEA), the extended Internal Market which unites all the EU Member States and three EEA EFTA States – Iceland, Liechtenstein and Norway. It is perhaps the most important right for individuals, as it gives citizens of the 31 EEA countries the opportunity to live, work, establish business and study in any of these countries.

      The legislation on the free movement of persons aims at eliminating all obstacles to the freedom of movement, and to give the same rights to nationals of an EEA State and their family members within the EEA by eliminating any discrimination on the basis of nationality.

      To complement and support the principle of the free movement of persons, the EEA Agreement also specifies the rules applicable in the fields of recognition of professional qualifications and social security coordination. Both are necessary to enable people to exercise their fundamental right to free movement effectively.”

      Yes, there are some fudges, but when the Polish government recommends the EEA as a good option for us I don’t think they’re envisaging that we could then apply restrictions on the free movement of Polish citizens to the UK.

      And do we really want endless rows with the governments of other countries over the coming years, about whether the UK really is like Lichtenstein, or whether we are justified in permanently adopting stringent safeguard measures to limit the immigration of their citizens? Would it not be better to have it out now and make a clean break, so they understand that however highly they may value their principle of unrestricted freedom of movement of persons we do not accept it?

    • James Munroe
      Posted September 2, 2016 at 10:31 am | Permalink

      EEA = Freedom of Movement of People.

      You are correct…no self interests at work.

  15. Brian Tomkinson
    Posted September 1, 2016 at 7:52 pm | Permalink

    JR: “I just hope the Bank of England and the other commentators who put a lot of store by the negative numbers last month will put equal store by the very positive numbers this month!”
    Haven’t you heard? According to Soubry and much of the commentariat this record rise is all down to the Bank of England acting so decisively!!

  16. ian
    Posted September 1, 2016 at 8:15 pm | Permalink

    They happy with selling the people of the uk out but now they are selling themselves out.

    Who is the bigger fool.

  17. zorro
    Posted September 1, 2016 at 10:28 pm | Permalink

    Indeed, the faces at the BBC were positively funereal at having to announce this comic good news. Some people who were very vociferous a few months ago are now nowhere to be seen, and not a word from them….. Wonderful 🙂

    zorro

  18. Lindsay McDougall
    Posted September 2, 2016 at 1:03 am | Permalink

    Indeed. There is now solid evidence that the base rate reduction and additional QE were totally unnecessary and may prove conterproductive, leading to inflation.

    So please, Mr Redwood, write to Mr Carney asking him to reverse these measures.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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