The renewed rise in the composite PMI supports our view that activity will continue to expand at a robust pace in the remainder of this year. Today’s flash estimate showed that the manufacturing PMI edged down from 49.2 to 49. More positively, the services PMI rose anew from 49.7 to 50.2 after edging downwards for 3 months, leaving it slightly higher than its historical average of 49. As a result, the composite PMI rose anew from 49.6 to 49.8, reversing the plunges in the last two months. While the composite PMI has been a poor guide to GDP growth in recent quarters, on past form it’s consistent with GDP rising by around 0.5% y/y.
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