GBP Purchasing Manager Index

It is the job of purchasing managers to estimate future demand and to adjust their orders accordingly. The Purchasing Manager Index (PMI) is based on these managers' opinions in order to predict the future of the sector. If the PMI is high it means there has been an increased demand for purchasing, which signifies positive economic growth. The opposite is of course true. This figure, being sensitive to the business cycle, often matches the situation of the economy as a whole.

This PMI for UK construction increased last week causing a surge in the strength of the sterling. The PMI for manufacturing however once again decreased for the sixth month running.

We are waiting for the PMI Services figure to come through Monday morning. In September this figure unexpectedly increased showing a small growth for the UK economy. Though this figure rarely affects markets, we saw that shortly after this data was released the sterling rose against the dollar and the euro. It might be worthwhile to review these figures tomorrow.

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