The continued rise in the composite PMI to its highest point since Q3 last year supports our view that activity will pick up again this quarter. Today’s flash estimate showed that the manufacturing PMI fell from 49.6 to 48.8, whereas the services PMI rose sharply from 50.9 to a four-month high of 52.7, leaving it far above its historical average of 49. As a result, the composite PMI rose from 50.5 to 51.1, the highest it has been since September last year. While the composite PMI has been a poor guide to GDP growth in recent quarters, on past form it’s consistent with GDP rising this quarter by around 1.0% y/y. We think that this will understate the strength in activity as our own forecast points to GDP growing by a robust 1.8% y/y this quarter instead due to base effects from the sharp plunge in Q1 last year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services