The markets pay great attention to the snapshots of manufacturing, construction and services that appear on the first three working days of the month. While data from the Office for National Statistics tells us about the past, reports from purchasing managers look to the future.
This week all three contain the same message: the economy is growing, but not quite so fast as in the last few months of 2013. All three were a bit lower than had been expected.
Analysts were quick to downplay the significance of the surveys, which are still consistent with growth remaining steady at 0.7% in the first quarter of 2014. All are above their long-term trend and a long way from signalling that the economy is going to stall.
That said, it is worth keeping an eye on what they say. Manufacturing is starting to feel the effects of a stronger pound while services are expanding at the slowest rate for nine months. Given the lack of consumer spending power, it would be a surprise to see 2013’s quarterly growth rates sustained throughout 2014. The PMIs may provide the first hint that they won’t be.
