December U.S. and Euroland Manufacturing Purchasing Manager Surveys

January 4, 2015

The U.S. PMI fell 3.2 points to a six-month low of 55.5.  55.5 is sufficiently above the 50 demarcation between expansion and contraction to convey continuing robust growth in factory activity.  December’s drop was powered by declines of 8.7 points in orders, 5.6 points in production and 6.0 points in prices.

Euroland’s factory PMI rose a half point to 50.6.  Such an outcome, revised from 50.8 estimated in the preliminary report, still conveys near stagnation and merely reverses November’s drop.  Within the euro area, sub-50 scores were reported of 49.4 in Greece, 49.2 in Austria, 48.4 in Italy and 47.5 in France.  The Spanish and Dutch readings of 53.8 and 53.5 were two-month lows.  Ireland continues to show the fastest manufacturing growth with a reading of 56.9.

The narrower 4.9-point spread between the U.S. and Ezone PMI readings, a six-month low, could reflect euro depreciation against the dollar.  For an eighth straight month, the average value of the euro was weaker in December than the in the previous month.  Manufacturing is more sensitive to changes in export competitiveness than service sector activity.

Mfg PMIs U.S. Euroland Spread EUR/USD
Jan 2013 53.1 47.9 +5.2 1.330
February 53.1 47.9 +5.2 1.334
March 51.5 46.8 +4.7 1.295
April 50.0 46.7 +3.3 1.301
May 50.0 48.3 +1.7 1.299
June 52.5 48.8 +3.7 1.319
July 54.9 50.3 +4.6 1.309
August 56.3 51.4 +4.9 1.331
September 56.0 51.1 +4.9 1.335
October 56.6 51.3 +5.3 1.364
November 57.0 51.6 +5.4 1.349
December 56.5 52.7 +3.8 1.370
Jan 2014 51.3 54.0 -2.7 1.361
February 53.2 53.2 0.0 1.366
March 53.7 53.0 +0.7 1.380
April 54.9 53.4 +1.5 1.380
May 55.4 52.2 +3.2 1.374
June 55.3 51.8 +3.5 1.360
July 57.1 51.8 +5.3 1.354
August 59.0 50.7 +8.3 1.332
September 56.6 50.3 +6.3 1.290
October 59.0 50.6 +8.4 1.268
November 58.7 50.1 +8.6 1.247
December 55.5 50.6 +4.9 1.232

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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