Global| May 03 2011UK MFG Takes Unexpected Dive
Summary
The UK MFG index fell unexpectedly in April. The index is on a seven month low. It is still 'strong' sitting at the 81st percentile of its high-low range. The construction and services indices lag and are not yet in for April. The [...]
The UK MFG index fell unexpectedly in April. The index is on a seven month low. It is still 'strong' sitting at the 81st
percentile of its high-low range. The construction and services indices lag and are not yet in for April. The other indices are all
about at the approximate same relative point in their respective ranges with construction in March in its 77th percentile and services
also in March in the 83rd percentile.
MFG has been a consistent bright spot in the UK economy. But in April that bright light faded. The MFG index is down for three-months running. It is no longer clear that the MFG is in an uptrend. The distributive trade index for sales for this time of year plunged to -12 in April from +9 in March. Retailing is under a great deal of pressure.
The UK is struggling under surging inflation and an ongoing austerity plan that includes a hike in the VAT. The MFG sector had been the backbone of an economy that was standing up in the face of these pressures. Housing also has had some staying power. But the MFG sector was a huge prop that now is at risk.
In response to the poor MFG report the pound fell on foreign exchange markets. Growth pessimism is on the rise.
| MFG, Construction and Services PMI CIPS/NTC | |||||||
|---|---|---|---|---|---|---|---|
| Monthly Readings | Change Over | ||||||
| Apr-11 | Mar-11 | Feb-11 | 3Mo | 6Mo | 12Mo | %-ile of Range |
|
| MFG | 54.58 | 56.73 | 60.76 | -1.88 | 3.08 | -0.80 | 81.4 |
| Construction | N/A | 56.41 | 56.46 | 7.36 | 2.62 | 3.34 | 77.3 |
| Services* | N/A | 57.11 | 52.60 | 7.40 | 4.31 | 0.65 | 83.2 |
| MFG range since January 1992; Construction Since April 1997 Services Since July 1995 | |||||||
| *Services & construction changes and ranking: Mar-11 which is the most current date. | |||||||
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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