Manufacturing PMI speeds up

The worriers about UK prospects often like to highlight the opinion p0lls of economic facts, the PMI figures giving an indication of how orders and confidence is trending in business.

Today’s figures show an acceleration in manufacturing orders and output prospects , with the Index surging to 57.4 where anything over 50 means growth. There is also a slowing of input price inflation. This is not surprising given the levelling off in  oil prices  and the fall in some other raw materials. China has also stopped raising her prices in recent week after a period of substantial rises in manufactured goods costs.

This is all positive for the second quarter output figures in due course.

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19 Comments

  1. Denis Cooper
    Posted May 2, 2017 at 2:29 pm | Permalink

    Related:

    a) Cumulative increase in UK GDP from the referendum up to the end of March:

    http://www.tradingeconomics.com/united-kingdom/gdp-growth#

    0.5% + 0.7% + 0.3% = 1.5%.

    b) Clegg’s supposed “Brexit squeeze” during 2017:

    http://www.proactiveinvestors.co.uk/companies/market_reports/177143/election-live-households-face-a-500-brexit-squeeze-this-year-says-nick-clegg

    £500 off average household disposable income of £35,300 = 1.4%.

  2. Jerry
    Posted May 2, 2017 at 2:35 pm | Permalink

    Light bulbs (of the old type [1]) always glow brighter just before the filament blows…

    Who knows what will happen at actual Brexit and beyond, that is what the “worriers” talk about, not the ‘phoney’ Brexit period we are in at the moment. For what anyone knows PMI could be up because companies want to get their projects complete or at an advance stage before 29 March 2019 for long term projects or are simply making hay whilst the sun is still shining. PMI is a measure of activity, not the reasons for such activity.

    Brexit is going to happen, bar a pollsters absolute nightmare of an election night, it doesn’t need to be resold day in day out. What politicians need to do now is to plan for both the best and worst outcomes – that way Brexit will be a success.

    [1] post Brexit, can we have our old style Tungsten filament bulbs back please, for many, perhaps most, that would be a positive Brexit outcome!

    • Know-dice
      Posted May 2, 2017 at 4:07 pm | Permalink

      Don’t you want to go to LED and save the planet? !!!!

      • Jerry
        Posted May 2, 2017 at 7:45 pm | Permalink

        @Know-dice; I would do if they could make them look more like light bulbs than blobs of plastic, not everyone can hide their light bulbs behind a shade, LED bulbs (never mind CFL’s), at least the ones I’ve seen, look crap in 115 year-old chandeliers…

        • Know-dice
          Posted May 3, 2017 at 8:11 am | Permalink

          Oh…it’s back to candles then 😉

    • pleb
      Posted May 2, 2017 at 7:08 pm | Permalink

      Too right Jerry re lightbulbs.

      • pleb
        Posted May 2, 2017 at 7:19 pm | Permalink

        Don’t get me on non convertible dimmer switches.

    • Lifelogic
      Posted May 2, 2017 at 7:48 pm | Permalink

      Brexit is going to happen – well we shall see. I have no confidence in Theresa May. Not only was she a remainer (and one prepared to lie to the electorate about having control of our borders within the EU under Schengen while Home Secretary) she is clearly a socialist and daft as a brush with her economic policies. She even wants more yet state schools that discriminate against people – on the grounds of the religion that their parents choose to ram down their throats.

      Nigel Lawson has it right in the Telegraph today. T May’s energy policy, with government price controls, is both bonkers and evil. It is government that is pushing up energy costs with their daft greencrap religion. Deregulate and allow some real competition.

      • Jerry
        Posted May 3, 2017 at 8:04 am | Permalink

        @Lifelogic; First rule of Politics, first you need to get elected! Nigel Lawson’s (and your own) vision of how the country should be run died on or before 1 May 1997.

        Is Mrs Thatcher the only PM who is allowed to have a “Damascus” moment? Have you forgotten that Mrs Thatcher was once very much the europhile, standing on Heath’s 1970 manifesto that took us into the EEC, campaigning to stay in the EEC in 1975, then as our PM she actively supported, even pushed for, the Single European Act in the early 1980s that set the roadmap towards the EU. If only she has said her No! No! No! to that Act…

        There is no reason why energy tariff control (not price control) would not work, after all many of the the energy companies make their money by selling add-ons, service contracts etc. that would not change.

    • APL
      Posted May 3, 2017 at 9:35 am | Permalink

      Jerry: “can we have our old style Tungsten filament bulbs back please, for many, perhaps most ”

      I believe the US has adopted the poisonous heavy metal fluorescent lamps in preference to Tungsten filament bulbs, too.

      Which leads me to conclude the change was implemented at a higher International level than the EU. So I suspect that leaving the EU will still leave us subject to the UN ( probably ) regulations about light bulbs.

      As an aside, which I think is interesting, I hardly see any of the fluorescent lamp fittings which were originally slated to replace the tungsten filament lamps, they all seem to have been superseded by led lamps – which I find to be much better than the fluorescent lamps but, equally, unnecessary as the TF lamps did the job very well.

      The whole transition to low power consumption or so called energy efficient fluorescent lamps, is a textbook lesson that the market knows best.

      Jerry: ” that would be a positive Brexit outcome! ”

      The positive outcome of BREXIT is that we have a greater say on how we as a country are governed. But we will need to look at the international level of governance too, because while we intend to leave the EU, there are other NGO that influence our domestic political policies.

  3. John Probert
    Posted May 2, 2017 at 2:44 pm | Permalink

    Oh Dear
    Its yet another terrible blow for the remainers

  4. Prigger
    Posted May 2, 2017 at 3:23 pm | Permalink

    Aside from cross-party and UK-EU argumentative grandstanding, the international financial world has already decided, by their actions and inactions, it believes we and the EU will come to an understanding and soon.
    One can see it on the currency markets and the lack of distraught high tones of speech from business leaders across the Atlantic.
    “Uncertainty” is definitely not there. The Labour and LibDem wolf packs have lost. Their outbursts, even before purdah begins is hystertical, without naming names.

  5. jason Wells
    Posted May 2, 2017 at 5:16 pm | Permalink

    What to believe? Its hard to know- we have a general election coming at the very same time as we are squaring off for the brexit talks.. and just like economics.. we can have lies damn lies and statistics or we can have information misinformation and disinformation and plain old black ops!.. it seems to me that at this time it is all just fake news anyway and depends upon whether we are prepared to believe in 350 on the side of a bus or not.

  6. Chris S
    Posted May 2, 2017 at 10:46 pm | Permalink

    Our relationship with Berlin and Brussels appear to be worsening by the day. The FT is reporting that Merkel is not prepared to repay us for any of our share of EU assets and the 27 want ongoing payments under the CAP added to the bill. As a result they are now to demand at least €100bn !

    This is a sick joke. Merkel must know that no British PM could survive in office if they agreed to the previous outrageous demand of “only” €60bn. €100bn is completely insane.

    Do they not understand that they need to trim the EU budget to match the money available ?

    With ever-increasing demands like this I’m even more convinced that no deal will be possible.

    • Know-dice
      Posted May 3, 2017 at 8:17 am | Permalink

      That’s what “they” mean by the PM not understanding Brussels – Certainly a “Hotel California” moment.

      Any sensible organisation would trim their commitments inline with a budget, not the EU it seems.

      This is a total lack of respect for the commitments that the UK has made to the EU since the seventies. Walk away certainly seems to be the best option at the moment.

      It will be interesting to see what Trump says to Merkel when she visits the USA..

  7. Newmania
    Posted May 3, 2017 at 5:16 am | Permalink

    I suppose this is meant to show how right we were to leave the EU. At this point quite why would want to cherry pick odd little upturns puzzles me, we are in the EU . The only explanation I can find is that it might distract from the darkening picture coming from the 27
    It seems increasingly likely that the gap between the delusions of Blue-Kip and reality is such that no plausible arrangement can do anything other than infuriate everyone and we will actually go to the catastrophe of WTO pay the bill for the privilege reduce immigration only slightly and permanently consign ourselves to irrelevance.

    Those are the signs I read anyway but the complete disinterest in reality amongst the acolytes is such that I feel as if I am brushing past zombies who look like me but have nothing behind the eyes at all.

    Brexit good Brexit good Brexit good Brexit good ….

    Reply I comment on the state of the economy as figures come out. Anti Brexit commentators were all over weak PMI figures immediately te, so lets look at the good ones now

    • Jerry
      Posted May 3, 2017 at 8:09 am | Permalink

      @JR reply; Not everyone who post views at odds to your own are anti Brexit.

  8. APL
    Posted May 3, 2017 at 9:41 am | Permalink

    JR: “This is all positive for the second quarter output figures in due course.”

    I wish you would focus on the underlying BREXIT issue, not the short term economic circumstances we find ourselves in.

    The underlying issue is that we govern ourselves, that *may* involve a loss of affluence and involve some extra hard work, but even if it does the benefit outweighs the cost.

    Being a free independent people, is worth much more than a illusory % point here or there. Economics is cyclical, independence once lost, cannot easily be recovered.

  9. Richard Butler
    Posted May 3, 2017 at 10:13 am | Permalink

    Remainer News; ‘Hopes of recession fade’.

  • 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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