Tuesday, January 6, 2015

6/1/2015: Irish PMIs December 2014: Strong End to 2014 Activity

Markit-Investec Irish PMIs releases were finalised today with Services data made public few minutes ago. Here is my quick analysis:

  • December 2014 Manufacturing PMI reading stood at 56.9, signaling a strong expansion. The index was at a 4-months high. 3mo average (Q4 average) stood at 56.7, which represents a rise on Q3 2014 average of 56.1. Q4 2014 marked the highest quarter in terms of Manufacturing PMI average. The series are now 4.5 points ahead of post-crisis average.
  • December 2014 Services PMI reading stood at 62.6, which, as Markit commentary says is a tie with June 2014 reading for the highest mark since February 2007. It is worth noting that September 2014 reading of 62.5 was, of course, statistically indistinguishable from December and June readings. 3mo average through December (Q4 average) is at 61.9, which is only marginally below Q3 and Q2 averages of 62.1. Relative to longer-period average, December reading is 7.1 points ahead of post-crisis average for the series.
Chart to illustrate:

Predictably, given the levels of both indices, there is some moderation in the growth rate of the index (second derivative, effectively):

Which is not a discouraging sign, as historically, the indices do signal strong growth in both sectors:

And as the chart above shows, uplift in Manufacturing is very strong, relative to historical trends. All good signals so far, but do stay tuned for some longer-range analysis later.

Note: as usual, I do not cover composition of the indices, as Investec refuses to supply actual data on indices components.  Should you want to consult their sell-side analysis, feel free to do so at http://www.markiteconomics.com/Public/Page.mvc/PressReleases

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