Wednesday, September 04, 2013
A hot August economy
Posted by David Smith at 12:00 PM
Category: Thoughts and responses

First manufacturing, then construction, then the dominant services sector. All three of the major sectors of the economy were very strong in August, with the trio completed by a rise in the services sector purchasing managers' index from 60.2 to 60.5. It is unlikely that these PMIs will translate directly into the third quarter gross domestic product figure. If they do, it will be a scorcher that will put the 0.7% second quarter rise in the shade.

This is Markit, which prepares the PMIs, on the strength of this week's data:

"Augustís survey of UK service providers signalled continued strong growth of activity and new business. Activity rose at the sharpest pace since December 2006, while growth in new work was the best seen since May 1997."

The all-sector PMI, covering manufacturing, construction and services, was the strongest since the series began in 1998. Whatever is causing it, the economy has fired into life. Impressive indeed.