Skip to content

Manufacturing Sector Hits Two-Year High as New Orders Gain Momentum

The latest seasonally adjusted CIPS/Markit Manufacturing Purchasing Managers’ Index® (PMI®), was released today.

The headline PMI® provides a single figure indication of operating conditions in the manufacturing sector. The index is calculated using data collected on new orders, production, employment, supplier performance and stocks of purchases.

  • The headline figure was 53.7 in October, a 3.8 point gain from September’s revised 49.9 and the highest reading since November 2007.
  • New orders-to-stocks of finished goods ratio, which tends to move in advance of the trend in production, rose to its highest level since data were first collected in January 1992.
  • Average purchasing costs increased for the second month running, and at the fastest pace since September 2008, mainly as a result of higher commodity prices.
  • Average vendor performance, a reliable indicator of pipeline price pressures, deteriorated to the greatest extent since March 2008. Although output prices continued to fall, the rate of decrease was only marginal.

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said:

“It appears that the manufacturing sector has turned a corner and is starting to pull itself out of recession.

“One of the most positive developments noted by purchasing managers is that their clients are starting to restock inventories, which is encouraging them to restart production lines. This is important as it suggests the growth may be sustainable rather than a short term blip”.

Rob Dobson, Senior Economist at Markit Economics commented:

“Caution remains the watchword for the sector. Job losses are still running at a fast rate and cost pressures are starting to re-emerge. Official data show that manufacturing employment is at its lowest level since comparable records began and output is at its mid-1992 level. With this and the knowledge that supportive fiscal and monetary conditions can not be maintained indefinitely in mind, the recent PMI data may represent a positive first step on the road to recovery but the track back is likely to be long and uncertain”.

Press Release: Markit Economics [PDF].

Note: The index is a “diffusion index”. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease.

The CIPS/Markit UK Manufacturing Purchasing Managers’ Index® (PMI®) is a composite index based on five of the individual indexes with the following weights: New Orders – 0.3, Output – 0.25, Employment – 0.2, Suppliers’ Delivery Times – 0.15, Stock of Items Purchased – 0.1, with the Delivery Times Index inverted so that it moves in a comparable direction.

Posted in Economy.

Tagged with .

No comments

By Samuel – 2 November, 2009

Secured Lending Expands in September as Unsecured Debt Contracts for Third Straight Month

Latest figures for lending to individuals, released today by the Bank of England, show that in September:

  • Total net lending to individuals rose by £0.7 billion, seasonally adjusted.
  • Total consumer credit fell by a net £0.3bn, comprising a £0.1bn expansion in net credit card lending and a £0.3bn contraction in ‘other loans and advances’.
  • Total net lending secured on dwellings grew by £922million to £1,299.5 billion, seasonally adjusted.
  • There were 56,215 (secured) loan approvals for house purchase.
  • 25,528 (secured) loan approvals for remortgaging, a near-10% decline from August’s 28,348.
  • 27,956 (secured) loans were approved for other purposes.
  • Secured lending by banks (excluding the effects of securitisations) increased by £3.5 billion, above both the £2.9 billion increase in August and the six-month average of £2.6bn.

Data: Bank of England.

Posted in Debt.

Tagged with , , , , , , .

No comments

By Bank of England|Publications – 29 October, 2009

Average House Prices Rise Again in September, Not Every Region Sees Increases

The latest figures for property selling prices in England and Wales, released by Land Registry today, show:

  • Average house prices in England and Wales rose 0.9% in September to £158,377.
  • The annual rate of house price inflation dropped to 5.6% in September, well off the annual drop of 16.3% set in February. However, average prices are still down 14.1% from the January 2008 peak.
  • London experienced the greatest monthly price rise with the average property price in the capital increasing to £314,954, a rise of 1.3%.
  • Wales registered the largest monthly decline, as average selling prices fell 2.6% to £119,717.
  • All regions experienced a decline in average property prices over the last 12 months with the North East recording the most significant annual price, down 8.2%.
  • Neath Port Talbot experienced the greatest annual price fall, dropping 18.7% year-over-year.
  • The volume of transactions increased again in July 2009, the most recent month for data. The number of completed house sales in England and Wales rose by 9% to 57,579 from 52,628 in July 2008. Monthly sales in England and Wales have risen steadily each month since January 2009 when they stood at 26,662.

Data: Land Registry

Posted in Residential.

Tagged with , , .

No comments

By Samuel – 28 October, 2009

London Retail Sales Rise, Confidence Still Fragile

According to the latest edition of the BRC-KPMG London Retail Sales Monitor, which covers the period of August 30th to October 3rd, released today:

  • Retail sales in central London in September were 7.5% higher, on a like-for-like basis, than a year ago, when sales had fallen 0.2%. This is compared for a 2.8% like-for-like increase for the UK as a whole.
  • Retail footfall in September was only just down on a year ago. Drier, milder weather than last September’s cold and rain encouraged people to get out to the shops.
  • Middle Eastern visitors returned after Ramadan, which ended earlier this year. Sterling’s weakness against the euro continued to attract western Europeans.
  • Food sales held up, though growth was dampened by lower food inflation. Clothing and footwear picked up and homewares and furniture also showed some uplift, helped by an improvement in consumer confidence and the housing market.

Commenting on the figures Stephen Robertson, Director General of the British Retail Consortium, said:

“This is dramatically different from the previous month’s figure. It’s the strongest London sales growth recorded since August 2008. But it must be treated with caution. This August’s figure was compared with a strong performance a year ago. Whereas, September’s figure is compared with a very weak performance last year – when sales began to slump as the global financial crisis developed.

“London outperformed the rest of the UK, boosted by overseas visitors taking advantage of the weak pound.

“These results offer retailers a glimpse of optimism in the all important run-up to Christmas. But consumer confidence is volatile and could easily slip back”.

Data: British Retail Consortium [PDF].

Note: The London Retail Sales Monitor (LRSM) measures changes in the actual value (including VAT) of retail sales from a sample of retailers. The Monitor measures the value of spending and doesn’t adjust for price changes. In the case of price inflation, sales volumes will increase by less than sales values. During periods of price deflation, sales volumes will increase by more than sales values.

Posted in Spending.

Tagged with , , , , , , , , , .

1 comment

By Samuel – 19 October, 2009

Asking Prices Rise 2.8 per cent on Month, Register First Year-on-Year Gain Since June 2008

The latest figures from the Rightmove House Price Index, released today, show:

  • Average asking prices rose 2.8% in October, the largest October rise for 6 years, taking prices to £230,184, a £6,188 increase on September’s £223,996.
  • Nationally, prices are now 0.2% higher than a year ago, the first year-on-year increase since June 2008.
  • London house prices now the highest Rightmove has ever measured, 0.8% above their November 2007 peak and 5.2% higher than this time last year. Demand continues to outstrip supply as the lack of fresh stock forces prices higher, only 16,808 properties coming to the market this month compared to 19,890 which came off.
  • Majority of buyers expecting more rises with only 1-in-10 expecting falls.
  • The number of new properties measured in this month’s index remains subdued at 94,629, a 36% decrease on the numbers measured 2 years ago. The number includes 22,000 stamp duty exempt sellers which appear to be looking to cash-in before buyer incentive ends in January.
  • Transaction levels are still 54% down on 2007 as ongoing lack of supply is driven by home owners deciding not to move given the current economic backdrop and forced sales subdued due to historically low interest rates and the effectiveness of forbearance schemes.

Releases: Rightmove.co.uk

Note: Rightmove measured 94,629 asking prices – circa 90% of the UK market. The properties were put on sale by estate agents from 13th September 2009 to 10th October 2009 and advertised on Rightmove.co.uk.

Posted in Residential.

Tagged with , , , .

No comments

By Samuel – 19 October, 2009