February PMIs: U.S. Has Commanding Lead over Euroland in Both Services and Overall Activity

March 5, 2012

The U.S. service-sector purchasing managers index improved 0.5 points in February, connoting a faster rate of expansion, whereas its euro area counterpart fell by 1.6 point and to less than 50 for the fifth time in six months, implying a contraction of activity. Composite Euroland PMIs in January and February of 50.4 and 49.3 suggest that a marginal dip in GDP this quarter is likely.  In 4Q11, GDP in the euro area contracted by 1.3% at an annualized rate.  In the United States, by contrast, the services PMI in January-February averaged 57.1, 4.3 points above the 4Q mean, and the manufacturing PMI of 53.3 on average in the first two months of 2012 surpassed the 4Q mean by 0.9 points.  These scores point to probable faster positive U.S. GDP expansion in 1Q than the 3.0% annualized pace last quarter.

The table below calculates the difference between the U.S. and Ezone PMI scores.  The services spread of 8.5 points shows a 10.5 point shift in favor of the United States since last April when that spread was negative 2.0 points.  The manufacturing PMI spread favored the United States in February for the ninth month in a row.  The advantage in manufacturing has narrowed since December and was similar to the advantage enjoyed six months earlier.  The sum of the two spreads, 11.9 points, exceeded 10 points for a fifth consecutive time and represents a 13.8-point swing in America’s favor since last May when Euroland held the advantage by 1.9 points.

PMIs U.S. Ezone   U.S. Ezone   Sum of
  Services Services Spread Mf’g Mf’g Spread Spreads
Jan 2011 58.3 55.9 +2.4 59.9 57.3 +2.6 +5.0
Feb 59.0 56.8 +2.2 59.8 59.0 +0.8 +3.0
March 56.3 57.2 -0.9 59.7 57.5 +2.2 +1.3
April 54.4 56.7 -2.0 59.7 58.0 +1.7 -0.3
May 54.5 56.0 -1.5 54.2 54.6 -0.4 -1.9
June 53.3 53.7 -0.4 55.8 52.0 +3.8 +3.4
July 53.4 51.6 +1.8 51.4 50.4 +1.0 +2.8
August 53.8 51.5 +2.3 52.5 49.0 +3.5 +5.8
Sept 52.6 48.8 +3.8 52.5 48.5 +4.0 +7.8
October 52.6 46.4 +6.2 51.8 47.1 +4.7 +10.9
November 52.6 47.5 +5.1 52.2 46.4 +5.8 +10.9
December 53.0 48.8 +4.2 53.1 46.9 +6.2 +10.4
Jan 2012 56.8 50.4 +6.4 54.1 48.8 +5.3 +10.9
Feb 2012 57.3 48.8 +8.5 52.4 49.0 +3.4 +11.9

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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One Response to “February PMIs: U.S. Has Commanding Lead over Euroland in Both Services and Overall Activity”

  1. […] Larry Greenberg discusses the commanding lead of the US over the euro-zone in PMIs. […]

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