U.S. Minus Euroland PMI-Mf’g Spread Widened to 3.0 Points in March

April 1, 2010

Manufacturing expanded robustly and at an accelerated pace last month in both Euroland and the United States.  Euroland’s purchasing managers index advanced 2.4 points to 56.6, best since November 2006.  The output and orders sub-indices hit their highest respective levels since June 2006 and June 2000.  The United States managed to outperform Euroland’s stellar manufacturing numbers.  The U.S. PMI advanced 3.1 points to 59.6, three points better than its Euroland counterpart and the best result since July 2004.  The U.S. production and orders sub-indices surpassed the 60 level with gains of 2.7 points to 61.1 on the former and 2.0 points to 61.5 on the latter.  The U.S. jobs index slid a point to a still respectable 55.1 value.

Within Euroland, manufacturing activity expanded in German (60.2), the Netherlands (57.8), France (56.3), Italy (53.7), Ireland (53.0) and even Spain (51.8), whose recession had persisted beyond end-2009.  The March-on-February point increases in those countries were 3.0, 2.6, 1.6, 2.1, 4.4, and 2.7 points.  The Greek debt crisis, however, depressed that economy’s index by a further 1.3 points to a deeply recessionary 42.9.  Elsewhere in Europe, Britain’s factory PMI improved 0.7 points to 57.2, highest since October 1994, and the Swiss PMI shot up 8.1 points to 65.5.  Sweden reported another above-60 score, this time of 61.1 after 61.5 in February and 61.7 in January.

The second quarter begins with evidence of considerable momentum in manufacturing on both sides of the Atlantic.  Europe is benefiting from a more competitive euro, and such has not impaired the U.S. economy.  EUR/USD quotes in the rightmost column below are monthly averages.  The trade-weighted dollar remains near early-February levels, so U.S. exports also remain quite attractively priced.  Both Europe and the United States are supported by a brisk rebound in emerging market demand, persistently loose monetary and fiscal policies, and better financial market functionality. 

Mf’g PMI’s U.S. Euroland Spread EUR/USD
Feb 2008 48.8 52.3 -3.5 1.475
March 49.0 52.0 -3.0 1.553
April 48.6 50.7 -2.1 1.574
May 49.3 50.6 -1.3 1.555
June 49.5 49.2 +0.3 1.557
July 49.5 47.4 +2.1 1.577
August 49.3 47.6 +1.7 1.497
September 43.4 45.0 -1.6 1.437
October 38.7 41.1 -2.4 1.331
November 36.6 35.6 +1.0 1.268
December 32.9 33.9 -1.0 1.351
Jan 2009 35.6 34.4 +1.2 1.326
February 35.7 33.5 +2.2 1.303
March 36.4 33.9 +2.5 1.306
April 40.4 36.8 +3.2 1.318
May 43.2 40.7 +2.5 1.365
June 45.3 42.6 +2.7 1.401
July 49.1 46.3 +2.8 1.409
August 52.8 48.2 +4.6 1.426
September 52.4 49.3 +3.1 1.455
October 55.2 50.7 +4.5 1.489
November 53.7 51.2 +2.5 1.491
December 54.9 51.6 +3.3 1.459
Jan 2010 58.4 52.4 +6.0 1.409
February 56.5 54.2 +2.3 1.368
March 59.6 56.6 +3.0 1.356

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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