Stay tuned for January manufacturing PMI from Brexit land!

Due at 0930 GMT

RBC:

  • January PMIs will provide the first look at the business survey signals for activity in Q1 2018.
  • After a drop in new orders and activity in the manufacturing PMI last month, a decline in the headline reading this time is the central case. We look for 55.7 from 56.3, still well above the long-run average.
  • We expect the construction PMI to be flat month-on-month at 52.2, still below the long-run average. The collapse of Carillion, announced on 15 January, could be partially reflected in the surveys, as PMI data are collected mid-month.
  • To the extent that any adverse knock-on consequences for the company's sub-contractors are captured in the survey responses this month, the skew of risks to this month's PMIs appears to be on the downside

Nomura on what to expect:

  • While the euro area flash manufacturing PMI eased back slightly in January (falling one point to 59.6), it remains strong and the services index rose by over a point. Thus, with European and global growth continuing apace, and sterling (despite its recent rise against both USD and EUR) still low relative to 2015 levels, we see continued strength in the UK manufacturing survey.
  • We forecast a small rise in the headline index after last month's 2-point decline.

HSBC on what to expect:

  • UK manufacturing PMI fell by two points in December, with a big drop in new orders and a slowdown in employment growth. However, the future output index was at its highest in seven months - perhaps pointing to still strong sentiment in a sector which has seen good growth over the last half-year or so.
  • For January, manufacturers may have felt the pain of higher oil prices (as their eurozone counterparts seem to have done). The rise in sterling may also be starting to slow growth in external demand for some. Nonetheless, still strong sentiment, and the fact that the base is already low after last month's fall, leave us forecasting little change in the index.

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