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MNI: UK Preliminary Data Forecasts - September PMIs

MNI (London)
By Jamie Satchithanantham
     LONDON (MNI) - With no hard data on the agenda for the week commencing
October 2 it will the soft data taking centre stage. The week looks set to be
fairly quiet data-wise, with the three Markit/CIPS purchasing manager indices
the standout releases.
     The PMIs have suggested that growth and underlying business activity in the
UK have held up well since the turn of the year, sometimes at odds with the
official data produced by the Office of National Statistics offering a more
subdued showing. 
     First up is the manufacturing PMI. The PMI hit a four-month high of 56.9 in
August with the expansion broad-based across all categories. The strong outturn
came in line with the latest data from the CBI in which its Industrial Trends
Survey showed output also holding up well. The survey's total order balance did
slip to +7 in September but this is well above the long run average of -19 and
its output expectations balance remained elevated at +28. 
     All-in-all, analysts see this robust trend extending to the September PMI
and forecast a marginal slip to 56.0
     On Tuesday the construction sister survey will be published. In August the
PMI did slip to its weakest showing in a year, falling to 51.1 from 51.9 in
July, with a reported slowdown in new orders to replace existing orders. Of the
six analysts who cast a forecast, expectations are set as high as 51.5 and as
low as 50.0 - where output neither expands or contracts. Taking the median of
these expectations generates a prediction of a slight further moderation to 51.2
     Finally, Wednesday sees the release of the Services PMI, the most watched
of the three surveys. The PMI fell to 53.2 in August, an 11-month low, from 53.8
in July with concerns of subdued client demand and heightened uncertainty about
the domestic economic outlook reportedly weighing on business activity. The
September PMI is seen broadly unchanged at 53.4.
     Official UK service data showed output decline 0.2% m/m in July, after
rising 0.3% m/m in June (revised down from a previous estimate of 0.4% m/m). The
services data for Q3 is seen as one of the more decisive input factors in the
Bank of England's Monetary Policy Committee's dilemma over when to hike the Bank
Rate and tight monetary policy. 
     A weaker June result and a weaker-than-expected July will have dampened
sentiment for a hike within the MPC camp and a healthy September PMI showing
will help restore any lost confidence.               
                              Sep           Sep       Sep
                    Manufacturing  Construction  Services
                              PMI           PMI       PMI
                            Index         Index     Index
Date Out                   02-Oct        03-Oct    04-Oct
Median                       56.0          51.2      53.4
Forecast High                56.9          51.5      55.6
Forecast Low                 55.0          50.0      53.0
Standard Deviation            0.5           0.5       0.8
Count                          11             6        11
Prior                        56.9          51.1      53.2
ABN Amro                     55.8           N/A      52.8
Capital Economics            56.7          50.5      53.4
Credit Suisse                55.5           N/A      53.0
Commerzbank                  56.4           N/A      53.7
Investec                     55.3           N/A      53.7
Lloyds TSB                   56.0          51.5      52.8
Natixis                      56.0          51.4      53.7
Nomura                       56.0           N/A      54.0
Oxford Economics             56.0          51.5      53.0
RBC                          56.9          50.3      55.6
UniCredit                    55.5          51.0      53.0
--MNI London Bureau; +44 203-586-2226; email:
MNI London Bureau | +44 203-865-3812 |

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