Economic Update: 11th December 2017

Please note this blog post was published over 12 months ago and so may not include the most up-to-date information, for example where regulation around investing has changed.

Economic Update: 11th December 2017


The purchasing manager’s indices (PMI) provide a window through which we can gain some insight into manufacturing, services and construction activity. The readings for November are generally good with a number above 50 indicating expansion.

Manufacturing (58.2 and the highest level in over 4 years)

Support from growing new orders and production is boosting confidence and should lead to more investment in capacity. This will in turn stimulate job creation. We expect optimism to remain solid in coming months helped by a weaker pound spurring exports.

Services (53.8 v 55.6)

The rise in inflation has had a slight negative impact on consumer spending on services. Input costs for service providers have also increased. However, if inflationary pressures ease, confidence should pick up and spending at a higher level resume.

Construction (53.1 v 50.8)

Having been in the doldrums, UK construction activity is expected to improve. Survey respondents noted that house building projects underpin the rebound in confidence. In the survey, the outlook for civil engineering weakened but this sector should gain support from the government’s new industrial strategy which we wrote about last week. If targets for improving infrastructure are realised it will inject enthusiasm and provide a focus to help boost the country’s productivity.

Summary – Composite (54.9 v 55.8)

The overall PMI, which is a composite of all 3 measures, fell slightly due to the dominance of the service sector in the UK. Although service sector confidence receded, better readings from manufacturing and construction are encouraging. Levels of confidence across survey respondents are consistent with a positive economic outlook.

UK Composite Monthly PMI and Underlying Growth (Measured Quarter by Quarter)

Global Markets