Wednesday, May 02, 2012
Slightly better money supply news
Posted by David Smith at 12:00 PM
Category: Thoughts and responses

The construction industry is sceptical about the sector's purchasing managers' index, which is a pity. The latest index, for April, shows the index down from March's 56.7 to 55.8, but still well above the 50 level consistent with expansion. March's index was a 21-month high, in contrast to official figures showing falling output.

In Europe, meanwhile, the manufacturing PMI dropped to a worrying 34-month low of 45.9 in April. Even German manufacturing output is in decline, with an index of 46.2.

Last weekend I wrote about the weakness of bank lending. Today's figures show a 1.4 billion increase in lending to individuals in March, compared with 1.3 billion on average for the previous six months. Mortgage approvals rose to 49,860 from 49,029 but were below their previous six-month average of 53,103.

Lending to businesses continues to fall, dropping by 1.7 billion in March, for a 3.4% annual fall. There was stronger growth in the adjusted M4 measure of the money supply, up an annualised 6.4% in the latest three months. But this is still a mixed monetary bag.