MNI: UPDATE UK 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.

     Tuesday will see the release of the construction sister survey. In August

the PMI slipped 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

eight 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 an unmoved result, standing still

at 51.5.

     Then, on Wednesday we will get 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 also seen unchanged at 53.2.

     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

                    Construction  Services

                             PMI       PMI

                           Index     Index

Date Out                  03-Oct    04-Oct

Median                      51.1      53.2

Forecast High               51.5      55.6

Forecast Low                  50        53

Standard Deviation           0.5       0.7

Count                          8        15

Prior                       51.1      53.2

ABN Amro                     N/A      52.8

Capital Economics           50.5      53.4

Credit Suisse                N/A      53.0

Commerzbank                  N/A      53.7

Investec                     N/A      53.7

JP Morgan                    N/A      53.2

Lloyds TSB                  51.5      52.8

Natixis                     51.4      53.7

Nomura                       N/A      54.0

Oxford Economics            51.5      53.0

Pantheon                    51.1      53.2

RBC                         50.3      55.6

Scotia                       N/A      53.5

Societe Generale            50.7      52.7

UniCredit                   51.0      53.0

     On Monday, the Manufacturing PMI showed a slowing in the sector's

expansion, with the headline index falling from 56.7 in August (revised down

from 56.9 previously) to 56.0 in September - virtually in line with the updated

MNI median of 56.0.  

     Despite the mild easing, which was broad based, the survey depicted the

sector firmly in expansion with both New Orders and Production still above their

long-run averages. There were, however, renewed signs of rising inflationary

pressures.   

     Should the picture of solid growth be maintained across the remaining two

surveys it will add to the feeling that the Bank of England remain on track for

a rate hike in November. 

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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