Some Convergence Last Month in the U.S. and Ezone Manufacturing PMI Indices
April 2, 2013
The 2.9-point decline last month of the U.S. purchasing managers index (PMI) exceeded the 1.1-point slide in its Euroland counterpart. Both readings constituted three-month lows. The monthly average EUR/USD level in March of $1.2949 was a four-month low.
Manufacturing in the United States had an above-50 reading, indicating an expansion of activity, albeit at a slower rate than in either January or February. The production subindex fell by 5.4 points, while that for orders slumped 6.4 point. Inflationary pressure fell by 7.0 points, but the jobs component rose 1.6 points.
Euroland’s manufacturing PMI has been under the 50 threshold since August 2011. The fastest rate of contraction in manufacturing was clocked in July, the month when ECB President Draghi committed to do whatever it takes to preserve the common currency, but the March reading was only 2.8 points better than last July. All individual Ezone members with reported PMI scores had values below 50 last month, including Ireland’s, which fell to 48.6 from 51.5 in February and Germany’s, which dropped 1.3 points to 49.0. The French, Italian, and Spanish PMIs representing the second, third and fourth biggest economies using the euro each had a PMI reading below 45.0. The Dutch index was a 10-month low, and Austria’s was at a 3-month low. At the bottom of the pack, the Greek index fell by 0.9 points to a 2-month low of 42.1.
Elsewhere in Europe, the manufacturing PMI of Britain (48.3) was below 50 for the second straight month and the fifth time in the past seven reported months. The Swiss PMI slid below 50 to 48.3 after two straight 50+ readings but sub-50 scores in the final quarter of 2012. Sweden’s PMI rose 1.2 points, but that was only the second above-50 reading in a row following scores in the 40’s previously.
| Mfg PMIs | U.S. | Euroland | Spread | EUR/USD |
| January | 54.1 | 48.8 | +5.3 | 1.290 |
| February | 51.9 | 49.0 | +2.9 | 1.323 |
| March | 53.3 | 47.7 | +5.6 | 1.320 |
| April | 54.1 | 45.9 | +8.2 | 1.315 |
| May | 52.5 | 45.1 | +7.4 | 1.280 |
| June | 50.2 | 45.1 | +5.1 | 1.254 |
| July | 50.5 | 44.0 | +6.5 | 1.230 |
| August | 50.7 | 45.1 | +5.6 | 1.255 |
| September | 51.6 | 46.1 | +5.5 | 1.286 |
| October | 51.7 | 45.4 | +6.3 | 1.297 |
| November | 49.9 | 46.2 | +3.7 | 1.283 |
| December | 50.2 | 46.1 | +4.1 | 1.313 |
| January | 53.1 | 47.9 | +5.2 | 1.330 |
| February | 54.2 | 47.9 | +6.3 | 1.334 |
| March | 51.3 | 46.8 | +4.5 | 1.295 |
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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