U.K. PMIs to highlight weakness in manufacturing

Of the three PMIs, the manufacturing PMI of U.K. should continue to be by far the weakest. The official data showed a very healthy bounce of 0.5% mom in August output and the preliminary Q3 GDP estimate embodied an implied September figure of 0.9%.

However, much of that just reverses losses in earlier months so probably massively overstates the trend which is believed to be one of modest output growth. The latest information on the sector comes from the CBI Industrial Trends survey which showed new orders falling, further weakening output growth as well. This points to the manufacturing PMI falling from 51.5 to 50.9.

Commercial construction should benefit from the strong pace of economic activity which is supporting business investment which requires new offices and factory structures. The PMI gained 2.6 points in September which looks excessive, so we predict a fall from 59.9 to 58.6. 

"Consumer demand is benefiting from a surge in real disposable income which is, in turn, driving services growth. Against that background it is odd to see the services PMI fall by 2.3 points, (even though it excludes retail sales) so a strong rebound is expected to 55.0", estimates Societe Generale.