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Manufacturing grows at its fastest rate in 2 1/2 years!


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Old 03-01-2017, 15:41
aurichie
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I can pretty much guarantee with absolute certainty that you are wrong - in that these are not projections but survey results from Purchasing Managers - the PMI is Calculated as follows;

PMI = (P1 * 1) + (P2 * 0.5) + (P3 * 0)

P1 = Percentage number of answers that reported an improvement.
P2 = Percentage number of answers that reported no change.
P3 = Percentage number of answers that reported a deterioration.

Thus, if 100% of the panel reported an improvement, the index would be 100.0. If 100% reported a deterioration, the index would be zero. If 100% of the panel saw no change, the index would be 50.0 (P2 * 0.5).

Therefore, an index reading of 50.0 means that the variable is unchanged, a number over 50.0 indicates an improvement, while anything below 50.0 suggests a decline. An index of 50.0 would arise if either all respondents reported no change or the number of respondents reporting an improvement was matched by the number of respondents reporting a deterioration.

They are not surveys of opinions, intentions or expectations and the data therefore represent the closest one can get to “hard data” without asking for actual figures from companies

see https://en.wikipedia.org/wiki/Purcha...ers'_Index
It's an economic indicator that uses mathematical modelling to come up with a figure. In my book, that is a projection. And I don't care how close it is to "hard data" it is often proven to be wrong.
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Old 03-01-2017, 16:04
paulschapman
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It's an economic indicator that uses mathematical modelling to come up with a figure. In my book, that is a projection. And I don't care how close it is to "hard data" it is often proven to be wrong.
It is a survey - not a projection a projection implies that the figures are based on an estimate of what purchases will be made - the PMI survey uses figures based on purchases that have actually been made.

As for Accuracy - I am sure you can provide a link showing how it has been 'proven' to be wrong - as an alternative here is a comment from the Chartered Institute of Procurement and Supply

https://www.cips.org/en-gb/cips-for-...assurance/pmi/

a highly accurate set of facts about current industry conditions in manufacturing, construction and services
Note the use of the word 'current' and not 'future'

Even Pantheon which reported that the post brexit figure may not be as bad as the PMI stated - acknowledged that the PMI was a useful barometer of growth. There point with the PMI is that it takes no account of the magnitude of changes

The PMI figures published in the aftermath of the Brexit vote were still broadly in line with other economic surveys.

See http://uk.businessinsider.com/brexit...-uk-pmi-2016-7

That the PMI survey overstated the effect of Brexit is perfectly understandable. Given that a Brexit would tend to suggest that it would be harder for Britain to export purchasing managers will order less in anticipation of that drop - however the drop ion the value of sterling made British goods more attractive and therefore exports increased and hence the purchases made to support those exports increased.

Or to put it bluntly the only indication of any 'inaccuracy' would indicate the PMI under-estimating growth.

It is the ONS figures which have historically under estimated growth when growth is in a post referendum or low level.
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Old 03-01-2017, 16:06
aurichie
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It is a survey - not a projection a projection implies that the figures are based on an estimate of what purchases will be made - the PMI survey uses figures based on purchases that have actually been made.
You can use whatever language you like bottom line is I don't believe the numbers. And I don't give a stuff about silly wikipedia links you dig up. Wikipedia is a joke anyway. And anyone can google for random links to pages that support your thinking.
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Old 03-01-2017, 16:08
Jayceef1
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Oh yes you did. And you were.
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Old 03-01-2017, 16:10
jmclaugh
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You can use whatever language you like bottom line is I don't believe the numbers. And I don't give a stuff about silly wikipedia links you dig up. Wikipedia is a joke anyway. And anyone can google for random links to pages that support your thinking.
LOL. I'm fairly sure you'd be quoting them if the figure supported your thinking.
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Old 03-01-2017, 16:19
andykn
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LOL. I'm fairly sure you'd be quoting them if the figure supported your thinking.
Like the Brexiters who were decrying it when it showed a sharp drop after the referendum.
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Old 03-01-2017, 16:21
Mark_Jones9
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I can almost guarantee with absolute certainty these projections, and they are just that - wildly speculative projections, will be revised down.

Our economy is in terrible shape and is on the verge of total collapse because of brexit.
Well that would make a change from other post referendum PMI's under estimating how well the UK is doing.
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Old 03-01-2017, 16:25
Mark_Jones9
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Like the Brexiters who were decrying it when it showed a sharp drop after the referendum.
When the PMI figures underestimated how well the UK economy was doing, as was revealed by the GDP figures when they came out. Like then hopefully these PMI figures are a underestimate.
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Old 03-01-2017, 16:27
paulschapman
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You can use whatever language you like bottom line is I don't believe the numbers.
Fine, on what basis you have not provided anything to back up this belief

And I don't give a stuff about silly wikipedia links you dig up. Wikipedia is a joke anyway. And anyone can google for random links to pages that support your thinking.
if you will not accept Wikipedia - please indicate which sources you will accept. I presume Markit themselves would not be one as they are the ones that produce the figures in the first place. Same for CIPS - I provided a link to the latter which you do seem to have ignored.

There is www.investopedia.com
but are you going to say the same as Wikipedia in dismissing that link as well.

I note you have not provided anything to back up your assertion that the PMI has been proven inaccurate.
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Old 03-01-2017, 16:33
BRITLAND
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Yes, that is right. Looks like good news for those areas in the UK that are heavy manufacturing are doing exceptionally well.

Don't forget the economists are predicting doom and gloom again.

I saw this on the BBC and thought you should see it:

UK manufacturing growth 'strengthens' - http://www.bbc.co.uk/news/business-38494939
This can't be right, brexit means brexit and we are all going to die this article must be BS
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Old 03-01-2017, 16:38
andykn
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When the PMI figures underestimated how well the UK economy was doing, as was revealed by the GDP figures when they came out. Like then hopefully these PMI figures are a underestimate.
According to paulschapman these figures are more accurate than the ONS ones.
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Old 03-01-2017, 16:39
andykn
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This can't be right, brexit means brexit and we are all going to die this article must be BS
Plenty of Brexiters called BS when these figures looked bad immediately after the referendum.
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Old 03-01-2017, 16:42
vanzandtfan
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No, you just don't understand what you're being told. That's why referenda are a bad idea.

Perhaps if you could provide an actual link to one of the things you've clearly misunderstood we can help.
I'm in a good mood so am going to assume this is a satirical dig at certain arrogant remainers. As such, well done, you nailed it.
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Old 03-01-2017, 16:44
andykn
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I'm in a good mood so am going to assume this is a satirical dig at certain arrogant remainers. As such, well done, you nailed it.
Yeah right, just strawman then run away.
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Old 03-01-2017, 16:49
Mark_Jones9
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According to paulschapman these figures are more accurate than the ONS ones.
As GDP figures produced by the ONS are official national statistics they are generally considered more reliable and definitive. Merkit even goes on about how its PMI figures can be used to predict GDP changes. Lauding how accurate its PMI figures are at doing so. While being selective on its choice of time span and which PMI and GDP figures to use, to illustrate how accurate it is.
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Old 03-01-2017, 16:52
paulschapman
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According to paulschapman these figures are more accurate than the ONS ones.
The ONS has historically under-estimated the post recession growth rate - as happened after the 2007/8 recession - the ONS later revised the figures for that recession, as they did later meaning that the economy reached it's pre-recession peak in Q3 2013 rather than Q2 2014 as they had originally said.

Also the ONS gets it's figures over a 3 month period - meaning the first figures often need revising. The PMI figures do not - so can be judged on the announcement.

http://www.wbs.ac.uk/news/ons-new-fi...e-uk-recovery/

See this link which goes into revisions made to the ONS Figures.
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Old 03-01-2017, 16:52
Capablanca
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You can use whatever language you like bottom line is I don't believe the numbers. And I don't give a stuff about silly wikipedia links you dig up. Wikipedia is a joke anyway. And anyone can google for random links to pages that support your thinking.
But you'd be lapping the numbers up with gusto if the projections were poor.
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Old 03-01-2017, 16:53
vanzandtfan
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Yeah right, just strawman then run away.
So you were being serious?

Thing is, I'm more than happy to accept that there are some clueless Brexiteers out there, I'm not going to ask you to back up your claim about Brexiteers earlier dismissed PMI figures

1. Most people are dumb
2. Even the people who aren't dumb are mostly economically illiterate.
2. Forum search is broken.

Do you really find it so hard to accept that quite a few remainers also made some really dumb comments about the fall of the pound?
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Old 03-01-2017, 17:03
andykn
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So you were being serious?

Thing is, I'm more than happy to accept that there are some clueless Brexiteers out there, I'm not going to ask you to back up your claim about Brexiteers earlier dismissed PMI figures

1. Most people are dumb
2. Even the people who aren't dumb are mostly economically illiterate.
2. Forum search is broken.

Do you really find it so hard to accept that quite a few remainers also made some really dumb comments about the fall of the pound?
Dumb comments maybe, "disaster for the economy" not really.

As for the other:

I know that but the warnings have been coming for some time, even before the Brexit result. Little to do with Brexit and more to do with global economies.
Absolutely. If anything it's the uncertainty caused by us not having invoked article 50 despite the referendum, that's a contributing factor. Lets get this business done
The IMF forecast now is that the UK will not even go into recession 2016, 2017 and will be the second fastest growing economy in the G7, faster than Germany and France. If your predictions of doom fail to materialize will you at least try to use the word if when making predictions in future.
The last time we had a negative PMI index GDP growth in the following quarter shot up. if PMI were such an accurate predictor of the state of the economy in the future would you not have expected a fall in GDP growth?

PMI
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Old 03-01-2017, 17:25
vanzandtfan
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Dumb comments maybe, "disaster for the economy" not really.

As for the other:
You don't think a remainer has ever called it a disaster for the economy? Seriously, have you ever read aurichie's post's?

Anyway -

"The pound plunging by 17% is a national disaster"

https://www.theguardian.com/commenti...ay-immigration

As for the rest, I'm impressed that you found it but would only say Majlis's post really questions the validity of PMI.
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Old 03-01-2017, 17:32
andykn
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You don't think a remainer has ever called it a disaster for the economy? Seriously, have you ever read aurichie's post's?

Anyway -

"The pound plunging by 17% is a national disaster"

https://www.theguardian.com/commenti...ay-immigration

As for the rest, I'm impressed that you found it but would only say Majlis's post really questions the validity of PMI.
Aurichie and Polly Toynbee (who specifically says "It will help a few manufacturers") is hardly "so many".

Edit: Google pmi site:forums.digitalspy.co.uk
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Old 03-01-2017, 17:36
paulschapman
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You don't think a remainer has ever called it a disaster for the economy? Seriously, have you ever read aurichie's post's?

Anyway -

"The pound plunging by 17% is a national disaster"

https://www.theguardian.com/commenti...ay-immigration

As for the rest, I'm impressed that you found it but would only say Majlis's post really questions the validity of PMI.
It depends really - look at the 91/92 recession - the pound lost value after dropping out of the ERM. This could have led to inflation returning but it did not and the economy went into one of the longest post war periods of growth - ending only in 2008 with the Great Recession.

The same thing could happen now - if the pound loses too much value then it will become inflationary - also it would see the cost of inputs into manufacturing going up - which would indicate those prices eventually having to increase (or we have to improve productivity).

The thing with Brexit is that if (and it is a big if) British goods have tariffs imposed it is going to make British goods more expensive - this will be offset by the reduction in sterling. If the reduction in sterling matches the effect of the extra tariffs then this will not have much if any effect.

Finally we are in the position we are now - we have not actually left the EU but sterling has dropped in value - this means that while British goods have suddenly got cheaper - our own goods are now cheaper for everyone else. This situation will last until either sterling recovers or Brexit actually happens.

Just to make a complex situation even more complex any Brexit drop in the value of sterling may already be accounted for in the drop which has happened. So again no adverse effects maybe minimal.

Put it another way - if anyone says they have any idea what is going to happen when and if Brexit actually happens - they are nuts.
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Old 03-01-2017, 17:49
andykn
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It depends really - look at the 91/92 recession - the pound lost value after dropping out of the ERM. This could have led to inflation returning but it did not and the economy went into one of the longest post war periods of growth - ending only in 2008 with the Great Recession.

The same thing could happen now - if the pound loses too much value then it will become inflationary - also it would see the cost of inputs into manufacturing going up - which would indicate those prices eventually having to increase (or we have to improve productivity).

The thing with Brexit is that if (and it is a big if) British goods have tariffs imposed it is going to make British goods more expensive - this will be offset by the reduction in sterling. If the reduction in sterling matches the effect of the extra tariffs then this will not have much if any effect.

Finally we are in the position we are now - we have not actually left the EU but sterling has dropped in value - this means that while British goods have suddenly got cheaper - our own goods are now cheaper for everyone else. This situation will last until either sterling recovers or Brexit actually happens.

Just to make a complex situation even more complex any Brexit drop in the value of sterling may already be accounted for in the drop which has happened. So again no adverse effects maybe minimal.

Put it another way - if anyone says they have any idea what is going to happen when and if Brexit actually happens - they are nuts.
We still might get inflation if the pound stays low, tariffs won't help much with that.
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Old 03-01-2017, 19:44
MartinP
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Um, yes. Did you think we would forget?

http://forums.digitalspy.co.uk/showp...1&postcount=63

Feel free to apologise...
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Old 03-01-2017, 19:50
paulschapman
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We still might get inflation if the pound stays low, tariffs won't help much with that.
Yes, with the emphasis on the word 'might' - inflation is a year on year measure so a balance might mean it is avoided - which is what happened in the early to mid 90's - the pounds loss of value did not lead to inflation.

My concern was always about our ability to sell to foreign markets once tariffs were imposed - hence why I voted remain, with inflation increasing and leading to drops in home markets - but to be honest now I'm not so sure that will happen.
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