PMIs

So much for manufacturing. The PMIs point to boom in this sector, but what about the rest of the economy?

On Tuesday (5th December), we got the PMIs covering services and then the composite PMIs.

The services PMI tracking the euro area rose to a six-month high, but drill down and things look better. The backlog of work rose at the quickest pace since 2011, suggesting that December will be a busy month as companies try and catch-up, and employment creation saw its biggest rise in ten years – just to be clear, that’s ten years.

As for the composite, the picture looks like this:

France 60.3 78-month high

Ireland 57.7 3-month high

Germany 57.3 2-month high

Italy 56.0 4-month high

Spain 55.2 2-month high

And what does this mean?

IHS Markit, which compiles the figures says that overall, PMIs are consistent with growth of 0.8 per cent in Q4, with Germany growing by 0.9 per cent.

These are impressive figures.

Meanwhile, we have had data on Greece. It grew by 0.3 per cent in Q3, and in the first 10 months of the year posted a modest budget surplus – although its primary budget – that’s before interest on debt – was over five per cent of GDP.

There is no guarantee this will last, but right now, the euro area is booming, and is doing so in a way that we have not seen before this decade.

The UK, by contrast, err hum, alas the latest composite PMI points to growth of 4.5 per cent in Q4.