UK: PMIs in focus this week – RBC CM

Research Team at RBC Capital Markets, suggests that the UK’s September PMIs will give us the full dataset for Q3 and so in theory provide us with a good guide to what these business surveys indicate GDP growth will have been for the quarter just gone.

Key Quotes

“In practice, given the wild volatility first down (July) then back up (August) following swings in confidence after the referendum, it is difficult to place as much confidence in the PMI signal this time around as would normally be the case.

Nevertheless, following July Index of Services data (Fri 30 Sep.) and this round of PMIs we will see if there is a case for reviewing our Q3 GDP growth forecast of -0.1% q/q. Coming from 0.6% q/q previously, our current forecast could be seen as a sharp referendum-related slowdown; however, we stress that Q2 was flattered by some one-offs and actually any slowing we see in Q3 growth is partly a reflection of weaker underlying ex-referendum momentum anyway. Expectations for September PMIs; manufacturing 53.1 from 53.3; construction 49.9 from 49.2; services 52.6 from 52.9.”