October 10, 2017

Chart of the Week: Brexit-Related Uncertainty Weighs on Economic Sentiment in Q3

by Fathom Consulting

By distilling information from numerous consumer and business surveys into one measure, Fathom’s UK Economic Sentiment Indicator (ESI) provides a monthly snapshot of underlying growth momentum.

Refresh the chart in your browser Edit chart in Datastream

Want more charts and analysis? Access a pre-built library of charts built by FathomConsulting via Datastream Chartbook in Thomson Reuters Eikon.

Since the beginning of this year, survey-based measures of economic output, including Fathom’s ESI, have required a large pinch of salt — exceeding official output data by some way. More recently, however, that wedge has narrowed, with the UK ESI falling throughout the third quarter, to 0.5% in September.

While the vast majority of survey respondents were less confident than they were in the second quarter, the deterioration was most marked in the construction sector. Notably, the recent drop in the Construction Purchasing Managers’ Index to below the key threshold of 50 has brought it more in line with official data, which has pointed to a contraction in building activity for several months now. Respondents identified political and economic uncertainty weighing on investment decisions and extending lead times for budget approvals as the principal cause.

Looking ahead, we expect both our ESI and official GDP data to soften further from here.

______________________________________________________________________

Thomson Reuters Datastream

Financial time series database which allows you to identify and examine trends, generate and test ideas and develop view points on the market.

Thomson Reuters offers the world’s most comprehensive historical database for numerical macroeconomic and cross-asset financial data which started in the 1950s and has grown into an indispensable resource for financial professionals. Find out more.

Article Keywords , , , , , , ,

Get In Touch

Subscribe