Tag: China

Monday Economic Report – January 26, 2015

Here is the summary for this week’s Monday Economic Report: 

The European Central Bank (ECB) finally announced its long-awaited quantitative easing program on Thursday. The ECB will purchase 60 million euros in bonds each month until September 2016—totaling at least 1.1 trillion euros overall—in an attempt to stimulate growth. Depending on where the Eurozone economy stands pointing September 2016, the ECB might extend its purchasing beyond that point. The impact on the euro was almost immediate, with the euro exchanging for $1.1206 at Friday’s close, down from $1.3927 on March 17, the high point of 2014. This will complicate manufacturers’ ability to sell goods into Europe, something that was mentioned in the sample comments in the latest Kansas City Federal Reserve Bank’s monthly survey (see below). (continue reading…)

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January Chinese and Eurozone PMI Figures Move Higher, But Global Softness Remains

Even as the global economy remains soft, there were some signs of stabilization in Asia and Europe, according to the most recent purchasing managers’ index (PMI) data. The Markit Flash Eurozone Manufacturing PMI increased from 50.6 in December to 51.0 in January. This was the highest level since July. The pace of growth for new orders (up from 50.2 to 50.4), output (up from 50.9 to 52.2) and employment (up from 50.6 to 50.9) each picked up somewhat. At the same time, exports (down from 51.6 to 50.7) eased slightly but continued to expand. (continue reading…)

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Monday Economic Report – January 5, 2015

Here is the summary for this week’s Monday Economic Report: 

Growth in manufacturing activity slowed somewhat in December, according to the Institute for Supply Management (ISM). The headline purchasing managers’ index (PMI) dropped from 58.7 in November to 55.5 in December, its lowest level in six months. Slower global growth, reduced commodity prices and the West Coast ports slowdown were cited in the ISM report as reasons for the decline. While this report was disappointing, it is notable that the lower figure followed several months of very healthy expansions in both new orders and production, and manufacturers were more upbeat at year’s end than earlier in the year. The manufacturing PMI data averaged 57.7 in the second half of 2014, an improvement from the 54.0 average observed in the first half. (continue reading…)

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Monday Economic Report – December 22, 2014

Here is the summary of this week’s Monday Economic Report: 

Manufacturing production was up sharply in November, with output increasing 1.1 percent for the month and 4.8 percent year-over-year. These healthy gains followed a softer-than-desired autumn, and we hope it suggests that production figures will begin to match the relative optimism regarding expected demand and output seen in a number of sentiment surveys, including the latest NAM/IndustryWeek Survey of Manufacturers. Capacity utilization for the sector was also higher, up from 77.6 percent in October to 78.4 percent in November. This was the highest utilization rate since December 2007, the first month of the Great Recession. Moreover, total industrial production rose 1.3 percent, with utility output in November also up significantly. Mining production was down for the month, but up a whopping 9.3 percent over the past 12 months, with the sector benefiting from increased energy exploration. (continue reading…)

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Markit: Chinese Manufacturing Activity Contracted for the First Time Since May

The Chinese economy continues to slow, with the HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) contracting for the first time since May. The headline index declined from 50.0 in November to 49.5 in December. New orders (down from 51.3 to 49.6), output (up from 49.6 to 49.7) and employment (up from 48.7 to 48.9) were below 50 – the threshold signifying reduced activity – in December, with production declining for the second straight month. On the positive side, new export orders (up from 51.1 to 51.7) were still growing somewhat modestly. As such, this report suggests that the Chinese economy is ending 2014 much as it began it, with softness in the manufacturing sector. (continue reading…)

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Global Manufacturing Economic Update – December 12, 2014

Here are the files for this month’s Global Manufacturing Economic Update:

It has become increasingly clear over the past few weeks that North America stands out as a bright spot in an ever-challenging global economic environment. Real GDP in the United States grew an annualized 4.2 percent in the second and third quarters, and U.S. manufacturers remain mostly optimistic about the next year. Indeed, the U.S. economy is expected to expand by around 3 percent, its fastest rate in a decade. Likewise, Canada and Mexico — our two largest trading partners — have made improvements in their respective economies since earlier this year. Canada has the distinction of having the highest purchasing managers’ index (PMI) of any of our top 10 trading partners, holding steady in November at 55.3. (continue reading…)

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Monday Economic Report – November 24, 2014

Here is the summary for this week’s Monday Economic Report:

Central banks around the world have acted recently in an attempt to lift a sagging global economy. On Friday, for instance, the European Central Bank (ECB) announced that it has begun purchasing asset-backed securities, finally beginning a quantitative easing program that some have long sought. Earlier in the day, ECB President Mario Draghi said that “we will do what we must” to spur economic growth. In addition, the People’s Bank of China surprised markets by cutting interest rates on Friday. These actions followed the Bank of Japan’s announcement on October 31 that it would increase the amount of its monthly asset purchases. (continue reading…)

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Markit: Chinese and European Economies Stalled in November

The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) fell to neutral (50) in November, down from 50.4 in October. This was the weakest reading since Chinese respondents noted contracting levels of activity from January through May. Indeed, output contracted once again (down from 50.7 to 49.5) for the first time since May, which was not a good sign. Hiring (down from 48.9 to 48.4) was also negative for the 13th straight month. On the positive side, new orders (up from 51.2 to 51.4) edged slightly higher, and exports (down from 51.7 to 50.5) continued to expand, albeit at a much slower pace. (continue reading…)

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Monday Economic Report – October 27, 2014

Here is the summary for this week’s Monday Economic Report:

What a difference a week makes. After a volatile week in financial markets amid worldwide economic worries, things calmed down last week. While the Dow Jones Industrial Average remains 2.7 percent below its all-time high on September 19, it gained 425 points last week, or 2.6percent. Attitudes shifted to a more positive stance on decent earnings reports and on news that firms remain mostly upbeat in their outlook. (continue reading…)

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Somewhat Better Manufacturing Data in China and Europe for October, But Weaknesses Persist

The HSBC Flash China PMI rose to its highest level in three months, up from 50.2 in September to 50.4 in October. It was the fifth consecutive monthly expansion in manufacturing activity in China, an improvement from the contracting activity levels experienced in the first five months of 2014. Yet, despite the better headline figure, many of the underlying data points reflect some easing in growth rates for the month, including new orders (down from 51.5 to 51.4), exports (down from 54.5 to 52.8) and output (down from 51.3 to 50.7). Hiring continued to decline but at a slower rate (up from 47.5 to 48.6).

As such, Chinese manufacturers are expanding but not by as much as we might prefer. This finding is consistent with the deceleration in other Chinese data, including real GDP, which slowed from 7.5 percent year-over-year growth in the second quarter to 7.3 percent in the third quarter. Fixed real investment (down from 16.5 percent year-over-year in August to 16.1 percent in September) and retail sales (down from 11.9 percent year-over-year to 11.6 percent) also declined. On the positive side, industrial production picked up, increasing from the year-over-year rate of 6.9 percent in August to 8.0 percent in September; yet, that remained lower than July’s 9.0 percent pace.

Meanwhile, the Markit Flash Eurozone Manufacturing PMI increased from 50.3 to 50.7. That is good news, as the September figure had been the lowest level since July 2013, when Europe first emerged from its recession. October’s reading was higher largely due to a pickup in output (up from 51.0 to 51.9) and employment (up from 50.1 to 50.6). Still, new orders (unchanged at 49.3) contracted for the second straight month, with exports (down from 51.6 to 50.5) easing. The Eurozone continues to face challenges in manufacturing, especially in terms of falling sales. The results also vary by country, with Germany (up from 49.9 to 51.8) improving somewhat, while French manufacturers  (down 48.4 to 47.6) continue to report weakness.

Closer to home, the Markit Flash U.S. Manufacturing PMI dropped slightly, down from 57.5 to 56.2. The pace of activity was down across-the-board, including new orders (down from 59.8 to 57.1), output (down from 59.6 to 58.0), hiring (down from 56.4 to 56.2) and exports (down from 54.1 to 51.9). While the index for new orders was at its lowest level since January’s 53.9 reading, it is hard to get too worked up over October’s decline for these indicators. After all, demand, production and employment continue to grow at decent rates, and manufacturers are reporting higher activity levels than earlier in the year.

Still, we would like to see better results to begin the fourth quarter, particularly for exports. Given the softness in worldwide markets, however, this weakness should not be a surprise.

Chad Moutray is the chief economist, National Association of Manufacturers. 

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