It was fab Friday yesterday as positive economic data lifted stocks and prompted a global rally with US, UK and German equities all hitting highs.
In the UK the construction industry signalled that it was recovering from the Brexit vote with Markit’s purchasing managers’ index (PMI) for the sector jumping from 53.1 in April to 56 in May: any figure above 50 denotes growth. This was higher than the expected 52.7 and puts the index at its highest since December 2015.
This followed the manufacturing PMI, published on Thursday, which hit 56.7 in May, down slightly from April’s 57.3, but higher than the expected 56.5. This is good news for the British economy with some hailing May as a blockbuster month — although they may do better to hold back until the service industry’s PMI figures are published on Monday.
Figures also showed that factories in the eurozone report strong growth with the factory PMI reaching 57 last month, up from 56.7 in April — led by rapid growth in German exports.
In the US unemployment fell to a 16-year low: non-farm payroll employment increased by 138,000 in May, falling short of predictions of a rise of 185,000, but the unemployment rate fell slightly from 4.4 per cent to 4.3 per cent. The figures, published on Friday, increase the likelihood of an interest rate rise.
Advertisement
The good news helped to take the edge off a fall in oil prices prompted by President Trump’s decision to walk away from the Paris climate change agreement. Brent crude fell below $50 a barrel with fears that if Mr Trump pulled out of the pact, then drilling in the US would increase — adding to the global oil glut.
The FTSE 100 closed the week up 3.86 points at 7,547.63 having hit a high of 7.598.99 yesterday.