5/12/2013: Services and Manufacturing PMIs for Ireland: November 2013

Yesterday, Markit and Investec released the second set of Purchasing Managers' Indices (PMIs) for Ireland covering Services sector. As usual, here is the analysis of combined Manufacturing and Services PMIs.

Detailed analysis of Manufacturing PMIs was covered here: http://trueeconomics.blogspot.ie/2013/12/2122013-manufacturing-pmi-for-ireland.html. Also, note, I covered actual services activity index (latest data through October) here: http://trueeconomics.blogspot.ie/2013/12/5122013-irish-services-index-october.html

Manufacturing PMIs in November 2013:
- Slipped to 52.4 (still in expansionary territory) from 54.9 in September.
- 3mo Average through August 2013 was 52.1 against 3mo average through November 2013 at 53.3.
- 6mo average through November 2013 is up 4.6% on previous.

Services PMIs in November 2013:
- Slipped to 57.1 from 60.1 in October.
- 3mo average for the period through August 2013 was at 55.4 and 3mo average through November is at 58.0
- 6mo average is up 6.6% on previous.

Both, Manufacturing and Services PMIs are now above 50 for 6 consecutive months. In statical terms, the two PMIs are above 50.0 for 6 months for Services and 3 months for Manufacturing.

Overall, the picture is consistent with upward sub-trend over 3 months for both series.

However, changes in 3mo averages warrant caution on sustainability:

Joint evolution of the series y/y is still encouraging:

And 24-months rolling correlation between series is rising once again - currently at 0.340, the highest since December 2011 when both series were in sub-50 territory.

So net is that the PMIs are still strong, trend is still upward and the short-run uplift continues. Big question is whether this is going to translate into real activity on the ground or mark another period of booming PMIs and stagnant economy. Time will tell...