UK Manufacturing PMI - positive surprise

Today's reading of 52.1 for the UK Manufacturing Purchasing Manager's Index, (PMI), was a positive surprise, as expectations had been for 50.0.

52.1 was the highest reading since May last year and compares with the nadir since then of 47.7, reached in November. The sub-components beneath the headline number were also encouraging as the employment index rose from 49.6 to 50.1, and the new orders component rose from 49.7 to 52.2. Orders versus stocks also moved in the right direction.

Friday's Services PMI is the one to watch
Tomorrow brings the release of the PMI for the construction industry and Friday brings the 'biggy' - the Services PMI. Services account for approx. 75 percent of UK GDP. Consensus calls for a reading of 53.3 and confirmation would raise hopes of the appearance of green shoots on
the UK economic landscape, but these figures all still suggest only anaemic, sub 1.0 percent per annum, growth and the shoots could easily be killed off if Eurozone troubles return to haunt the global economy - as we still suspect they will over the next quarter or two. Enjoy the bounce in Sterling versus the US Dollar while it lasts!