Wednesday, February 06, 2013
Return to growth?
Posted by David Smith at 08:00 AM
Category: Thoughts and responses

Tomorrow's industrial production figures will provide further information on how the economy ended 2012. Meanwhile, yesterday's service sector purchasing managers' index, which showed a jump back above 50 to 51.5 in January, suggested that, taking manufacturing, construction and services together, the economy expanded in January. This was Markit's assessment:

"Companies reported the strongest rise in services activity for four months, building on the promising news from manufacturers last week, where output was reported to have grown at the fastest rate for 16 months in January. Although construction remains a worry and continues to contract, the PMIs collectively point to the UK growing marginally again in January."

“Stronger growth would inevitably have been recorded had the country not suffered the heavy snowfall, suggesting the underlying trend is even stronger than these numbers indicate." Its release is here.

There are, of course, two points to make. January is only one of the first quarter's three months and the read-across from the PMIs to Office for National Statistics data is often not perfect.