Thursday, October 3, 2013

3/10/2013: Services and Manufacturing PMIs for Ireland: September 2013

In the previous posts I covered separately both Service PMI for Ireland and Manufacturing PMI (released by Markit & Investec). As noted, both series show strong performance in September. Here is the combined analysis:

Both Services and Manufacturing PMIs are now above their historical crisis-period averages. Manufacturing PMI is slightly ahead (0.1 points) of its historical pre-crisis average since May 2000 when both series start running coincidently. Services PMI is now slightly below its historical pre-crisis average.

Services PMI have broken out of the flat trend and are now trending up for the last 12 months. However, Manufacturing PMI continues to move side-ways, although on average remaining positive.

Two major points: September 2013 reading puts both indices at statistically significant levels above 50.0, which is the first such occurrence since February 2011:

In addition, we are seeing stronger positive correlation between the two indices (the 12mo rolling correlation below is only indicative) established since February 2013 low:

In other words, both sides of the economy are now performing better, but we need this momentum to be sustained over 2-3 months to see serious feed-through into actual economic activity figures.

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