The Markit Flash Eurozone Manufacturing PMI edged ever-so-slightly higher, up from 51.0 in January to 51.1 in February. This suggests very modest growth in manufacturing activity in February, with better data for new orders (up from 50.6 to 50.9), output (up from 52.1 to 52.2) and exports (up from 50.7 to 51.8). Hiring in the Flash Eurozone Composite PMI, which includes all segments of the economy, rose to its highest level since August 2011, but this was primarily in the service sector. Indeed, for manufacturers, the pace of employment growth was unchanged in February at 50.6.
Markit also released preliminary manufacturing activity data for France (down from 49.1 to 47.0) and Germany (unchanged at 50.9), which continue to move in opposite directions. While the French economy saw improvements overall, its manufacturing sector has now contracted for ten straight months. At the same time, demand was slightly stronger in Germany, with exports (up from 49.5 to 50.8) shifting positive again for the month. German real GDP increased 0.7 percent in the fourth quarter, larger than expected and higher than the 0.3 percent growth for the Eurozone as a whole. Still, the European economy remains more sluggish than desired, with the European Central Bank attempting to stimulate growth, and market watchers continue to follow developments in Greece.
Meanwhile, the Markit Flash Japan Manufacturing PMI declined from 52.2 to 51.5, its lowest level since July. This was largely due to a slower pace of growth for both new orders (down from 53.1 to 51.1) and employment (down from 51.4 to 50.7). Yet, output (up from 52.3 to 52.7) and exports (up from 51.5 to 52.8) were both higher, representing modest growth in each case. Exports expanded at their fastest rate since August. Overall, the Japanese economy has begun to show some signs of recovery, with real GDP increasing 0.6 percent in the fourth quarter. This followed two consecutive quarters of declines.
Closer to home, the Markit Flash U.S. Manufacturing PMI increased from 53.9 to 54.3, with strong production growth (up from 55.7 to 56.0) helping to fuel the better activity numbers. Still, many of the other measures were weaker in February, with sluggish global growth, a stronger U.S. dollar, the West Coast ports slowdown and other factors dampening demand. New orders (down from 55.0 to 54.7), exports (down from 51.2 to 50.2) and employment (down from 53.4 to 51.7) decelerated somewhat for the month, with exports slowing to a crawl. Despite the easing in some of these figures, however, sales and output continue to expand at relatively decent paces.
China will release Flash PMI numbers on Wednesday, February 25. Final data points for all of these measures, including China, will come out on Monday, March 2.
Chad Moutray is the chief economist, National Association of Manufacturers.
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