Wednesday, June 04, 2008
A trio of weak purchasing managers' surveys
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

The most-watched coincident indicators of economic output, the purchasing managers' indices (PMIs), published by NTC in association with Royal Bank of Scotland, are all in for May, and they are all weaker than expected. Today we had the service sector index, which dropped from 50.4 to 49.8 (a level consistent with contraction) and showed a sharp drop in employment.

The PMIs for manufacturing, down from 50.8 to 50.0, and construction, down even more sharply from 46.1 to 43.9, pointed to an across-the-board slowdown for the UK economy. Normally these measures would be consistent with a rate cut from the Bank of England this week but inflationary pressures point firmly to no change.