UK PMI Manufacturing was finalized at 58.9 in March, up from February’s 55.1. That’s the highest level in 121 months since February 2011. Business optimism rose to seven-year high. But supply-chain disruption and inflationary pressures built.

Rob Dobson, Director at IHS Markit: “Signs of Spring have appeared in the UK manufacturing sector, with the PMI hitting its highest level in a decade… Weak export sales and supply-chain issues are likely to remain constraints on growth moving forward, however… Demand outstripping supply to such a wide extent is meanwhile driving up prices… The longer these inflationary and supply-chain worries persist, the greater the potential to curb the strength of the upturn as the economy unlocks in the coming weeks and months.”

Full release here.

UK PMI Construction dropped to 55.2 in August, down from July’s 58.7, below expectation of 56.9. Markit said new order growth eased to a five-month low. All three monitored segments recorded softer rise in activity. But rise in input prices was second-fastest amid severe supply chain disruption.

Usamah Bhatti, Economist at IHS Markit: “Evidence that the UK construction sector began to feel the impact of ongoing supply chain disruption was widespread midway through the third quarter of 2021. Growth rates for overall activity as well as the three monitored subsectors eased further from the recent highs earlier in the summer. Similarly, new business inflows have continued to increase at a marked pace, yet even here the rate of growth has eased to a five-month low.

Full release here.

UK CBI said retail sales grew in the year to October at the faster pace than last month, balance up from 11% to 30%. Growth is expected to accelerate further next month to 35%. Orders growth accelerated from 20% to 48% but is expected to ease slightly back to 41% next month.

Ben Jones, CBI Principal Economist, said: “The UK’s economic recovery has been pretty bumpy lately and the same seems true of the retail sector. Sales performance has jumped around in recent months, while stock shortages continue to bite. Disruption to supply chains, combined with staff shortages and uncertain public health conditions mean retailers are finding it difficult to plan for the winter ahead.”

Full release here.

UK payrolled employment rose 33k, or 0.1% mom in October. Over the year, payrolled employment rate 398k or 1.3% yoy. Median monthly pay rose 5.9% yoy, down from prior month’s 6.0% yoy. Claimant count rose 17.8k, above expectation of 15.0k.

In the three months to September, unemployment rate was unchanged at 4.2%, matched expectations. Average earnings including bonus rose 7.9% yoy, above expectation of 7.4%, slowed from prior 8.2%. Average earnings excluding bonus rose 7.7% yoy, matched expectations, slowed from prior month’s 7.8%.

Full UK employment release here.

UK PMI Services was finalized at 48.7 in January, down from December’s 49.9, fastest contraction since January 2021. PMI Composite was finalized at 48.5, down from prior month’s 49.0, in contraction for the sixth straight months.

Tim Moore, Economics Director at S&P Global Market Intelligence:

“January data pointed to the weakest service sector performance for two years as cutbacks to business and consumer spending resulted in a fourth consecutively monthly reduction in output levels. The latest survey illustrates that the UK economy risks falling into recession as labour shortages, industrial disputes and higher interest rates take their toll on activity.

“However, the downturn in service sector output remained relatively shallow at the start of 2023. Encouragingly, new order volumes moved closer to stabilisation and export sales picked up in January, which contributed to a marginal upturn in overall employment numbers.”

Full release here.