PMI data reinforces tale of three economies

Good, bad, worse in the US, UK and EU.

Today's Markit PMIs (standard reminder: purchasing managers at companies surveyed, aggregated into an index showing activity across the economy, normalised so that 50=no change) highlight the discrepancy between the Eurozone economy (still contracting, albeit less each month than it has been for the better part of a year) and the US economy (which is growing, and growing faster most months).

(Today's releases are the "flash" PMIs, compiled from the first 85 per cent or so of managers to respond; they are thus to be taken with a larger pinch of salt than normal)

The Eurozone composite PMI – covering services and manufacturing – rose slightly to 47.3. This is a nine-month high, but still represents moderate contraction of GDP:

 

Even worse is the manufacturing data. Again a nine-month high, it now stands at 46.3, and rose by just 0.1 from November.

Compare that figure with the US, where the manufacturing PMI showed a sharp increase to 54.2, signifying healthy expansion:

As ever, the UK data lies somewhere between the two:

The UK is undergoing a renewed bout of economic weakness as it heads towards the end of 2012. The all-sector Output Index from the three PMI surveys rose from 49.7 in October to 50.2 in November, edging above the 50.0 no change mark. However, despite the increase, the latest reading was the third-weakest since April 2009 and consistent with the economy sliding back into contraction after the temporary growth surge seen in the third quarter.

The UK data also highlights the folly of relying too much on the PMI information to predict economic performance, though. All through the double-dip recession, commentators were insisting, based on the strength of PMI data, that the ONS was mistaken. And even as it fell to new lows, the ONS recorded the massive growth of last quarter.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Recess confidential: Labour's liquid party

Sniffing out the best stories from Westminster, including Showsec, soames, and Smith-side splits.

If you are celebrating in a brewery, don’t ask Labour to provide the drinks. Because of the party’s continuing failure to secure a security contractor for its Liverpool conference, it is still uncertain whether the gathering will take place at all. Since boycotting G4S, the usual supplier, over its links with Israeli prisons, Labour has struggled to find an alternative. Of the five firms approached, only one – Showsec – offered its services. But the company’s non-union-recognition policy is inhibiting an agreement. The GMB, the firm’s antagonist, has threatened to picket the conference if Showsec is awarded the contract. In lieu of a breakthrough, sources suggest two alternatives: the police (at a cost of £59.65 per constable per hour), or the suspension of the G4S boycott. “We’ll soon find out which the Corbynites dislike the least,” an MP jested. Another feared that the Tories’ attack lines will write themselves: “How can Labour be trusted with national security if it can’t organise its own?”

Farewell, then, to Respect. The left-wing party founded in 2004 and joined by George Galloway after his expulsion from Labour has officially deregistered itself.

“We support Corbyn’s Labour Party,” the former MP explained, urging his 522,000 Facebook followers to sign up. “The Labour Party does not belong to one man,” replied Jess Phillips MP, who also pointed out in the same tweet that Respect had “massively failed”. Galloway, who won 1.4 per cent of the vote in this year’s London mayoral election, insists that he is not seeking to return to Labour. But he would surely be welcomed by Jeremy Corbyn’s director of communications, Seumas Milne, whom he once described as his “closest friend”. “We have spoken almost daily for 30 years,” Galloway boasted.

After Young Labour’s national committee voted to endorse Corbyn, its members were aggrieved to learn that they would not be permitted to promote his candidacy unless Owen Smith was given equal treatment. The leader’s supporters curse more “dirty tricks” from the Smith-sympathetic party machine.

Word reaches your mole of a Smith-side split between the ex-shadow cabinet ministers Lisa Nandy and Lucy Powell. The former is said to be encouraging the challenger’s left-wing platform, while the latter believes that he should make a more centrist pitch. If, as expected, Smith is beaten by Corbyn, it’s not only the divisions between the leader and his opponents that will be worth watching.

Nicholas Soames, the Tory grandee, has been slimming down – so much so, that he was congratulated by Tom Watson, Labour’s deputy leader, on his weight loss. “Soon I’ll be able to give you my old suits!” Soames told the similarly rotund Watson. 

Kevin Maguire is away

I'm a mole, innit.

This article first appeared in the 25 August 2016 issue of the New Statesman, Cameron: the legacy of a loser