MNI: UK Preliminary Data Forecasts - September PMIs

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: jamie.satchithanantham@marketnews.com

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