Parade of the Manufacturing PMIs

June 3, 2013

Various and sundry purchasing managers surveys for May released overnight produced a spectrum of results.  The official and HSBC-compiled indices presented a mixed and confusing picture.  Euroland figures depicted a recession that seems to be lessening in intensity.  Australia’s index revived sharply but remained well below the 50 no-change threshold.  India is treading water.  Britain scored a second straight month above 50, conveying expansion.

The euro has a 1.30/USD handle, just barely at $1.3017 and is 0.2% higher than Friday’s close.  The greenback’s largest losses are 0.8% against the Aussie dollar, 0.6% versus the kiwi and 0.5% relative to sterling.  The dollar firmed 0.2% against the loonie and Swissie and is unchanged versus the yen and yuan.

Share prices are lower after Friday’s sharp slide in America.  Equity declines amounted to 3.7% in Japan and the Philippines, 1.9% in Indonesia, 0.8% in Australian and India, 0.7% in Taiwan, 0.6% in South Korea and Singapore, 0.5% in Hong Kong, and 0.2% in China and Malaysia.  In Europe, stocks have loost 0.6% in Spain and Italy, 0.4% in Britain and Germany, and 0.3% in France.

The 10-year Japanese JGB yield is off five basis points.  the 10-year British gilt is up four bps, and the 10-year German bund is steady.

Oil and gold prices edged up 0.4% to $92.32 per barrel and 0.1% to $1393.40 per ounce.

The manufacturing purchasing managers survey authorized by the Chinese government, CFLP, stayed slightly above 50, printing at 50.8 after readings of 50.6 in April, 50.9 in March, 50.1 in February and 50.4 in January.  Such has exceeded the 50 no change threshold since a score of 49.8 last September.  As rumored in the market on Friday, however, the HSBC Chinese PMI slipped below 50 for the first time since October, printing at 49.2 after 50.4 in April, which was a tad worse than the rumors implied.  Finally, a non-manufacturing PMI for China was at 54.3 last month after 54.5 in April.

Euroland’s manufacturing PMI improved to 48.3 in May, 0.5 points better than its preliminary indication and 1.6 points above April’s score.  The latest reading indicates the slowest rate of contraction since February 2012 and suggests that GDP in the second quarter is on track to drop about 0.2%.  The improvement was shared in all reporting Ezone members and accompanied by more downward pressure on input costs and output prices.

  • Germany posted a three-month high score of 49.4 after 48.1 in April.
  • The French PMI rose 2.0 points to 46.4 but disturbingly reflected a greater pace of contraction than either Italy or Spain.
  • Italy’s 47.3 reading was at a 4-month high and 1.8 points above the reading in April.
  • Spain’s 48.1 score was the best since May 2011 and 3.4 points higher than April’s reading.
  • The Greek factory PMI of 45.3 constitutes a 23-month high though still clearly contractionary.
  • The Dutch PMI was at a 3-month high of 48.7 and a half-point higher than April’s reading.
  • Austria also had a 3-month high of 48.2.

Australia’s PMI had plunged to 36.7 in April from 44.4 in March but rebounded to 43.8 in May.  New Zealand was closed today in observance of the Queen’s birthday.  In other Aussie data releases, the MI-TD index of expected CPI inflation ticked up a tenth percentage point to 2.2% in May.  Job ads fell 2.4% in May, and commodity prices were 8.6% lower than a year before when expressed in SDRs (special drawing rights).  Corporate earnings rose 3% in the first quarter.

India’s manufacturing purchasing managers index printed 0.9 points lower at 50.1, down 4.1 points from the February reading.

Britain’s 51.3 PMI in May beat expectations of 50.2 or 50.3 and was the second above-50 result in a row.  February’s U.K. score had been 47.9.

Indonesia’s manufacturing PMI had a reading of 51.6, similar to April’s 51.7 which had been a 6-month peak.  Export orders grew more rapidly than in April.

Taiwan’s PMI sank worryingly to a six month low of 47.1 from 50.7 in April and 51.2 in March.

Vietnam’s PMI also fell below the 50 threshold, printing at 48.8 following two straight scores above 50.

The South Korean PMI stayed above 50 for a fourth consecutive month but at 51.1 fell by 1.5 points compared to the April reading.  Input price inflation was at an 8-year low.  Separately South Korean consumer price data put inflation at a 14-year low of 1.0%.  Core CPI was 1.6% in May.

Non-oil purchasing manager indices were reported for three middle-eastern economies.  Saudi Arabia’s 57.3 in May was at a 6-month low and 0.7 points below the April score.  The UAE purchasing managers index climbed in contrast to a 3-month high of 55.3 from 54.0 in April.  And Egypt’s PMI rebounded from a 4-month low of 44.2 in April to 48.5 in May.

South Africa is only treading water from a PMI standpoint.  That economy’s  index was 50.4 in May after 50.5 in April and 49.3 in March.

In Turkey, the export orders PMI sub-component was above 50 for the first time since November, but the overall purchasing managers index of 51.1 was 0.2 points weaker than in April and down from 54.0 in January.

Returning to Europe,

  • Poland’s 48.0 was 1.1 points better than the 45-month low of 46.9 scored in April.
  • Hungary’s PMI sank 4.6 points to 47.1, the first sub-50 result since December.
  • The Czech PMi edged up to 50.1 following 13 consecutive sub-50 readings including 49.5 in April.
  • Russia scored a 50.4 in May after 50.6 in April, 50.8 in March and 52.0 in January and February.
  • Norway’s factory PMI rose 2.8 points to 52.0.
  • Sweden’s 51.9 also showed further improvement.
  • So did the Swiss reading of 52.2 after 50.2 in April and 48.3 in March.

Japanese motor vehicle sales were 7.3% lower in May than a year earlier.

Turkish CPI inflation accelerated to 6.5% in May from 6.1% in April.  PPI inflation also picked up to 2.2% from 1.75.

Australian retail sales rose 0.2% on month in April and recorded a 3.2% 12-month increase after 3.3% in March.

The U.S. PMI survey from the Institute of Supply Management is now awaited.  Construction spending figures also get released, and Yellen and Williams of the Federal reserve will be speaking.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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