U.S. Enjoyed Greatest Manufacturing Advantage over Euro Area in 22 Months

December 1, 2011

In November, America’s manufacturing purchasing managers index rose 1.9 points to 52,7, while the Euroland counterpart weakened 0.7 points to 46.4.  Values above 50 signify expanding activity, and those below that level imply a contraction. The U.S. index hasn’t printed below 50 since July 2009, the first month of the present business cycle expansion.  Euroland’s index has been under 50 in each of the past four reported months and lower than in the prior month for each of the last seven reports.  A softer euro, which was 6.2% weaker against the dollar on average in November than last April, hasn’t yet turned America’s widening advantage in manufacturing against the euro zone.

The composition of the U.S. survey was more impressive than the 1.9-point improvement in composite index.  The sub-indices for new demand and production improved by 4.3 points and 6.5 points, and both had November reading above 56.0.  On the other side of the Atlantic, Greece (40.9), Spain (43.8), Italy (44.0), and the Netherlands (46.0) had worse readings than Euroland’s overall score of 46.4, which was 12.6 points below the February reading of 59.0.  The two largest economies in the common currency area, Germany and France, saw their PMI readings drop by 1.1 and 1.2 points between October and November to 47.1 and 49.1.  The German and French economies were the main growth engines in the first half of 2011, but their factory sectors are now contracting along with those in all the other participating Euroland nations.  Euroland’s recent PMI scores suggest that it will suffer a 0.6% non-annualized contraction of GDP in the fourth quarter of 2011.

Many non-Euroland economies in Europe also reported sub-50 manufacturing PMIs today such as Britain at 47.6, Switzerland (44.8), Sweden (47.6), Norway (48.6), Poland (49.5), Hungary (47.8), the Czech Republic (48.6), and Denmark (47.7).   

Mfg PMIs 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 57.1 54.2 +2.9 1.368
March 60.4 56.6 +3.8 1.356
April 59.6 57.6 +2.0 1.342
May 57.8 55.8 +2.0 1.255
June 55.3 55.6 -0.3 1.220
July 55.1 56.7 -1.6 1.278
August 55.2 55.1 +0.1 1.288
September 55.3 53.7 -0.4 1.308
October 56.9 54.6 +2.3 1.389
November 58.2 55.3 +2.9 1.368
December 58.5 57.1 +1.4 1.323
Jan 2011 60.8 57.3 +3.5 1.337
February 61.4 59.0 +2.4 1.365
March 61.2 57.5 +3.7 1.400
April 60.4 58.0 +2.4 1.445
May 53.5 54.6 -1.1 1.433
June 55.3 52.0 +3.3 1.438
July 50.9 50.4 +0.5 1.423
August 50.6 49.0 +1.6 1.435
September 51.6 48.5 +3.1 1.377
October 50.8 47.1 +3.7 1.371
November 52.7 46.4 +6.3 1.356

Copyright 2011, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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