Before you read, we would like to recommend you sit down. This is not going to be good. In the last few days the Chartered Institute of Purchasing and Supply (CIPS) have released their latest data on manufacturing and services – and it is not pleasant.
But first, here is a whiff of good news. The CIPS Purchasing Managers index fell to 51 – okay, that is lower than last month’s score, or the month before that, but it has been much lower than that before. It was marginally lower in January, and three years ago, was down to just 47.1. In fact, CIPS has anything above 50 as suggesting expansion in the sector, and the index has now been above 50 for 44 months, so that is good.
But output price inflation hit a new series record high. As for the rate of increase in factory gate prices, this has now reached new highs in every month this year. The New Orders index recorded a reading of 49.5 – its lowest in almost three years, but perhaps more worrying, and a little puzzling, the index for tracking export orders fell to 49.1 This index has been below the 50 no-change mark for four months.
This is of course contrary to what it should be like. Exports are supposed to provide our big hope. Manufacturers are supposed to be reaping the harvest of a lower pound relative to the euro and picking up the baton from exhausted consumers.
Never mind, there’s always services.
Alas, the latest CIPS Business Activity index for services fell to 50.4, the lowest level since April 2003.
What is especially worrisome about the CIPS services index is that it does not include retail.
You may say, okay that’s not good, but even so, the CIPS index recorded a worse showing in 2003 – and yet back then the economy did all right. Sure, manufacturing is not expanding at the pace it had been expanding at, but at least it is moving forward.
The point though is that in 2003 when the CIPS service index was lower, the housing market was in the midst of a boom, which in turn pulled up consumer spending.
It does feel as though we are losing out on all quarters.
This is only anecdotal evidence, of course, the official statistics are altogether more upbeat.
In that TV series Dallas, when Sue Ellen caught JR red-handed, the man TV audiences loved to hate said, “Sue Ellen, are you going to believe me, or your lying eyes?” The question now is, are you going to believe the official data, or the lying surveys?
Comments
Trackbacks