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Markit: U.S. Manufacturing Output in November Grew at Strongest Rate since March 2015

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The Markit Flash U.S. Manufacturing PMI rose from 53.4 in October to 53.9 in November, a 13-month high. More importantly, output grew at its strongest rate since March 2015 (up from 55.3 to 56.0), a sign that U.S. manufacturing activity has continued to stabilize from softness earlier in the year. Indeed, the headline index bottomed out in 2016 at 50.7 in May, and it has averaged 52.0 year-to-date through the first 11 months. Beyond production, other key indices were also stronger in November, including new orders (up from 54.7 to 55.5), exports (up from 50.9 to 51.0) and hiring (up from 51.6 to 52.4). Overall, this report provides some encouragement for manufacturers, many of whom have been rather cautious in their economic outlook for much of the past two years.

Meanwhile, the Markit Flash Eurozone Manufacturing PMI increased from 53.5 to 53.7, its fastest pace since January 2014. As such, the continent’s economy continues to move in the right direction, with activity accelerating at a modest pace. Overall, the headline PMI has trended higher since bottoming at earlier in the year at 51.2 in February. New orders (up from 53.8 to 54.5) and exports (up from 53.4 to 54.1) were both stronger in this report. Yet, output (down from 54.6 to 54.1) and employment (down from 53.7 to 53.5) each pulled back a little in this survey despite expanding at a still-decent rate. In addition, manufacturers in Germany (down from 55.0 to 54.4) and France (down from 51.8 to 51.5) also reported some easing in growth in November, even as the underlying data continues to be quite positive for both.

Markit: Eurozone Manufacturing Activity Accelerated in October to a 2½-Year High

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The Markit Flash Eurozone Manufacturing PMI increased from 52.6 in September to 53.3 in October, its fastest pace since March 2014. As such, the continent continued to brush off post-Brexit worries, with activity accelerating in October at a modest pace. Overall, the headline PMI has trended higher since bottoming out at earlier in the year at 51.2 in February. The underlying indices were mostly higher, including new orders (up from 53.4 to 53.6), output (up from 53.8 to 54.4) and employment (up from 52.1 to 53.7). The only weakness was exports (down from 53.3 to 53.0), which pulled back slightly but remained a fairly decent pace of expansion. Read More

Markit: Manufacturing Sentiment Eased in Eurozone after Brexit Vote

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Interestingly, the last Markit survey’s responses on Eurozone manufacturing activity were due on June 23, the day of the “Brexit” vote for the United Kingdom to exit the European Union. In that survey, the Markit Eurozone Manufacturing PMI rose to a six-month high, with stronger data in most European markets, including Germany and the U.K. Suffice it to say, the surprise – at least for financial markets – decision for Britain to leave the European Union has shifted sentiment since then. In the latest survey, the Markit Flash Eurozone Manufacturing PMI fell to a two-month low, down from 52.8 in June to 51.9 to July, mainly on slowing new orders (down from 53.4 to 52.0). The composite measure, which includes the service sector, edged down from 53.1 to 52.9, its lowest level since January 2015 and off from 54.3 six months ago. Read More

On the Day of the “Brexit” Vote, Eurozone Manufacturing Activity Turned Higher in June

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The Markit Flash Eurozone Manufacturing PMI rose from 51.5 in May to 52.6 in June, its highest level so far in 2016. The irony is that this news came out on the day of the “Brexit” vote, with the United Kingdom deciding whether or not to leave the European Union. Along those lines, the Markit Flash Eurozone Composite PMI, which includes services, declined from 53.1 to 52.8, its lowest point since January 2015. As such, even with encouraging industrial news, overall economic sentiment remained mixed, with modest growth that has slowed so far this year. Uncertainties related to the “Brexit” vote, combined with global headwinds, have added to those anxieties.

Nonetheless, manufacturers reported faster expansions for new orders (up from 51.7 to 53.4), exports (up from 50.9 to 52.5), output (up from 52.4 to 53.8) and employment (up from 51.2 to 52.1) in June. Demand and production grew at their fastest rate since December, recovering from the lull in May, which had been the slowest pace year-to-date. Overall, though, Eurozone manufacturers have now reported growth in the sector in every month since June 2013. Read More

Markit: U.S. Manufacturing Activity Grew at the Slowest Pace since September 2009

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U.S. manufacturing activity grew at the slowest pace since September 2009, according to preliminary figures from Markit. The Markit Flash U.S. Manufacturing PMI decreased from 51.5 in March to 50.8 in April. In general, the strong dollar and weaknesses abroad have dampened international demand and overall sentiment over the course of the past year. Manufacturing activity has decelerated significantly over the past 12 months, with the main PMI number down from 54.2 in April 2015. In this report, output (down from 51.4 to 50.3) and hiring (down from 52.1 to 50.2) each pulled back to a near-standstill, with exports (down from 50.0 to 48.5) contracting for the second time in the past three months. On the other hand, new orders (down from 52.8 to 52.0) continued to expand modestly, but with some easing for the month.

As such, this report stands in sharp contrast to the better-than-expected sentiment seen in the competing data from the Institute for Supply Management (ISM). In that release, new orders and output each grew surprisingly strong in March, lifting its manufacturing PMI value above 50 for the first time since August. It provided some encouragement after months of softness, even as other economic data – including this one from Markit – continue to suggest ongoing challenges. Read More

Markit: U.S. Manufacturing Activity Eased to a Two-Year Low in November

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After rebounding somewhat in October, activity pulled back again in November, according the most recent Markit Flash U.S. Manufacturing PMI data. The composite measure declined from 54.1 in October to 52.6 in November, its lowest level since October 2013. The headline index peaked for the year at 55.7 in March, with activity decelerating since then. Exports (down from 51.6 to 49.5) returned to negative territory in November, a sign of just how much the stronger dollar and weaknesses abroad have dampened international demand and overall sentiment. Other indices reflected slower growth for the month, even as there continued to be modest expansions in activity. This included new orders (down from 55.5 to 53.1), output (down from 55.4 to 54.6) and employment (down from 52.9 to 51.9). Read More

Markit: European Manufacturing Activity Improved in February Ever-So-Slightly

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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. Read More

Global Manufacturing Economic Update – December 12, 2014

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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. Read More

Growth in Chinese and European Manufacturing Activity Slowed in August, While U.S. Was Up Sharply

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Given the contraction seen in the Eurozone economy in the second quarter, analysts were eagerly anticipating the preliminary Markit Purchasing Managers’ Index (PMI) data released this morning. Indeed, the HSBC Flash Eurozone Manufacturing PMI decelerated from 51.8 in July to 50.8 in August, suggesting that growth in manufacturing activity on the continent has slowed to a crawl. Germany (down from 52.4 to 52.0) eased slightly, but with output falling to its slowest pace since June 2013. French manufacturers (down from 47.8 to 46.5) continue to struggle, with its Flash Manufacturing PMI contracting for the fourth straight month and new orders declining at their quickest pace since in 16 months.

For the Eurozone as a whole, manufacturing activity was slower across-the-board. New orders (down from 52.1 to 51.0), output (down from 52.7 to 50.9), exports (down from 52.6 to 52.1) and employment (down from 49.9 to 49.1) were all lower in August, with the latter contracting for the second consecutive month. Production growth was at its weakest point since Europe emerged from its deep recession 13 months ago. In essence, the good news was that European manufacturing activity did not contract in August, but it is clear that demand and output are moving in the wrong direction. These data will continue to be fodder for those looking for economic stimulus in the months ahead.

Meanwhile, the HSBC Flash China Manufacturing PMI was also much softer for the month, down from 51.7 in July to 50.3 in August. As such, manufacturing expanded for the third straight month, but only barely so. New orders (down from 53.3 to 51.3), output (down from 52.8 to 51.3) and export sales (down from 52.6 to 51.4) downshifted from a modest pace to slower growth, and employment (down from 49.4 to 48.2) deteriorated further. In fact, hiring has been negative in 16 of the past 17 months. While China has begun to stabilize its economy after weaknesses earlier in the year, these data show that there remains room for improvement.

Japan’s economy contracted in the second quarter, falling 1.7 percent in the second quarter or 6.8 percent year-over-year. Yet, the Markit/JMMA Flash Japan Manufacturing PMI (up from 50.5 to 52.4) seem to indicate that manufacturers are in a better mood, with a pickup seen in demand and output. This was the fastest pace since March, or before the imposition of a new tax in April that sent the economy lower. The underlying data were mostly higher, including sales (up from 51.2 to 54.4), production (up from 49.8 to 53.2), exports (up from 50.8 to 53.0) and hiring (up from 50.2 to 51.1).

Closer to home, the Markit Flash U.S. Manufacturing PMI was up sharply, up from 55.8 to 58.0. This was the highest level for manufacturing activity in the U.S. since April 2010. Both new orders (up from 59.5 to 60.8) and output (up from 59.7 to 60.2) were above 60, suggesting strong growth and closely mirroring similar data from the Institute for Supply Management (ISM). New export orders (up from 50.3 to 54.4) and employment (up from 51.2 to 54.6) were both higher, as well, with each recording modest expansions. Overall, these data were quite positive, indicating that the recent rebound in manufacturing activity in the U.S. (after softness in the early months of 2014) has begun to take hold.

Flash data give us an advance estimate of manufacturing activity incorporating “approximately 85% of the usual monthly survey replies,” with the final PMI data for the month released in early September.

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

Continued Progress in China and the U.S., with Europe and Japan Growing More Modestly

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The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) expanded for the second straight month in July, rebounding from softness from January through May. The headline index rose from 50.7 in June to 52.0 in July, its highest level since March 2011. The underlying data were mostly higher, including new orders (up from 51.8 to 53.7), output (up from 51.8 to 52.8) and exports (up from 50.6 to 52.7). The sales pace was the fastest since January 2011, and each of these measures are a sign that recent stimulative actions taken by the Chinese government have had a positive impact. Some downsides in the PMI survey contracting hiring rates for the 16th consecutive month (up from 48.7 to 49.5) and slightly accelerated raw material prices (up from 50.8 to 52.9).

Meanwhile, Japanese manufacturing activity also expanded for the second straight month, but it eased slightly in July. The Markit/JMMA Flash Japan Manufacturing PMI declined from 51.5 to 50.8. The recent uptick in activity has materialized as the Japanese economy has recovered from an increased in taxes that went into effect on April 1st. Still, manufacturers in the country cannot cheer yet, as output growth came to a halt in July (down from 51.8 to 50.0, or neutral). Other indicators were mixed. Export sales (up from 49.0 to 51.6) and employment (up from 49.8 to 50.8) both shifted to positive growth, but the pace of new orders decelerated somewhat (down from 52.0 to 51.1).

In other news, the Markit Flash Eurozone Manufacturing PMI edged marginally higher, up from 51.8 to 51.9. The Flash Eurozone PMI Composite PMI was up more strongly, increasing from 52.8 to 54.0, suggesting healthier growth in the service sector. For manufacturers, the data suggest slightly faster growth in production (up from 52.8 to 53.0) and exports (up from 52.4 to 52.7), but the pace of growth for new orders (51.9) and employment (50.3) were unchanged.

Overall, these figures provide a limited degree of encouragement for the manufacturing sector in Europe, which has worried of late about slow economic and income growth. It is also still clear that the data vary on country-by-country basis, with German manufacturing activity (up from 52.0 to 52.9) accelerating in July but with French manufacturers noting yet another deterioration in sales and output. Indeed, the French economy remains in a rut, with manufacturing activity positive in just three months since January 2013.

Closer to home, the Markit Flash U.S. Manufacturing PMI decreased from 57.3 to 56.3. Despite the slight easing in July, manufacturing activity continues to grow at relatively decent rates. Through the first seven months of 2014, the top-line index has averaged 55.9, stronger than the 53.5 average noted for 2013 as a whole. The July data show both new orders (down from 61.7 to 59.8) and output (down from 61.0 to 60.4) growing at a healthy paces, albeit with some deceleration for the month. Yet, hiring growth remains more modest (down from 53.8 to 52.1) and export sales (down from 50.9 to 50.6) were just barely growing, suggesting that there remains room for improvement.

Flash data give us an advance estimate of manufacturing activity incorporating “approximately 85% of the usual monthly survey replies,” with the final PMI data for the month released on August 1.

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