Manufacturing continues to be the principle driving force behind business confidence in the UK, according to the latest results from the UK’s Credit Managers’ Index (CMI).
The CMI is a diffusion Index which produces scores of between one and 100, typically ranging between 40 and 60, with the index’s lifetime mean sitting at 55.72.
Ten equally weighted factors are considered – three favourable and seven unfavourable and the Index is calculated on a simple average of the 10 factors.
Manufacturing experienced a 1.3-point rise, seeing the Index close at 64.0, an all-time CMI high which representing a year-on-year rise and the second successive quarter that the sector has improved.
This suggests the positive effect that currency fluctuations are having on the UK’s exporting market since the Brexit referendum.
The CMI’s headline figure also closed up 0.9 points to finish at 60.1. This was primarily the result of a 0.8-point increase in the services sector, which closed up at 58.3.
The uplift follows Q1 2017’s decreases and shows the economy in much ruder health according to several key indicators such as GDP growth, predominantly in Services, which rose 0.5%.
Construction and Production were the two other indicators that slowed down, with decreases of 0.9% and 0.4% respectively.
The headline figure has, however, now climbed to 60.1, broadly in line with the FTSE All Share market – the eighth time (and third successive quarterly result) in the CMI’s history that is above this threshold.
The CMI gauges nationwide levels of credit being sought and granted by credit professionals across the UK and acts as a primary indicator of actual levels of business being conducted.
It consistently maps the FTSE All Share Index and the EU Economic Sentiment Indicator.
The survey also reported that the markets continued to hold up with improvements in the FTSE All Share Index despite a dip in June, and overall a fairly low market volatility.
Philip King, Chief Executive of the CICM, said: “Despite Brexit negotiations continuing and no immediate outcome in sight, credit professionals are noticing a resilient economy across most sectors.
“That is not to say that this upturn will be necessarily long lasting – there are many potential pitfalls along the way as confidence remains fragile and the situation could easily take a turn for the worse at any stage. Caution is the watch word.”
The CMI’s results show a significant change in regional confidence too: Only the North East (45.0), Yorkshire and Humber (45.6) and Northern Ireland are the only regions to have dropped below the 48-point mark. The South East improved by 22% up to 63.3, while the West Midlands also showed signs of improvement closing up by 12% to 63.6.