Strong Factory Growth Acceleration in Both Ezone and U.S.
January 3, 2017
The Institute of Supply Management’s U.S. manufacturing purchasing managers index climbed 1.5 points in December to a two-year high of 54.7. Markit Economics’ U.S. factory-sector PMI told a similar story, printing at a 21-month peak of 54.3 in the final month of 2016. The euro area PMI in manufacturing, compiled by Markit Economics, rose almost as much as its ISM counterpart with a 1.2-point gain to 54.9. The differential between the ISM index of U.S. manufacturing and the Markit Economics-compiled Ezone PMI consequently narrowed to 0.3 points to -0.2, which signaled the smallest U.S. disadvantage since July. Manufactured goods feature prominently in trade, and so the PMI differential is sensitive to currency competitiveness. So far, however, the relative strength of the U.S. PMI hasn’t reflected the dollar’s significant appreciation in recent months. The euro averaged $1.054 last month, down from $1.121 in September and $1.134 last April.
Faster activity growth in U.S. manufacturing last month was most pronounced in orders (up 7.2 points), prices (up 11.0 points) and production (up 4.3 points between November and December).
All of the members of Euroland experienced stronger PMI scores in December than November, and these ranged from 57.3 in The Netherlands to 49.3 in Greece. PMI increases in December totaled 2.0 points in Ireland, 1.8% in France, 1.3 points in Germany, 1.0 points in Greece, 0.9 points in Austrial, 0.8 points in Spain, and 0.3 points in the Dutch instance.
| 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 | 54.3 | 53.2 | +1.1 | 1.366 |
| March | 54.4 | 53.0 | +1.4 | 1.380 |
| April | 55.3 | 53.4 | +1.9 | 1.380 |
| May | 55.6 | 52.2 | +3.4 | 1.374 |
| June | 55.7 | 51.8 | +3.9 | 1.360 |
| July | 56.4 | 51.8 | +4.6 | 1.354 |
| August | 58.1 | 50.7 | +7.4 | 1.332 |
| September | 56.1 | 50.3 | +5.8 | 1.290 |
| October | 57.9 | 50.6 | +7.3 | 1.268 |
| November | 57.6 | 50.1 | +7.5 | 1.247 |
| December | 55.1 | 50.6 | +4.5 | 1.232 |
| Jan 2015 | 53.5 | 51.0 | +2.5 | 1.162 |
| February | 53.3 | 51.0 | +2.3 | 1.135 |
| March | 52.3 | 52.2 | +0.1 | 1.083 |
| April | 51.6 | 52.0 | -0.4 | 1.081 |
| May | 53.1 | 52.2 | +0.9 | 1.116 |
| June | 53.1 | 52.5 | +0.6 | 1.123 |
| July | 51.9 | 52.4 | -0.5 | 1.101 |
| August
September October |
51.0
50.0 49.4 |
52.3
52.0 52.3 |
-1.3
-2.0 -2.9 |
1.114
1.123 1.121 |
| November
December Jan 2016 February March April May June July August September October November December |
48.4
48.0 48.2 49.5 51.8 50.8 51.3 53.2 52.6 49.4 51.5 51.9 53.2 54.7 |
52.8
53.2 52.3 51.2 51.6 51.7 51.5 52.8 52.0 51.7 52.6 53.5 53.7 54.9
|
-4.4
-4.8 -4.1 -1.7 +0.2 -0.9 -0.2 +0.4 +0.6 -2.3 -1.1 -1.6 -0.5 -0.2 |
1.076
1.090 1.087 1.111 1.114 1.134 1.130 1.124 1.106 1.120 1.121 1.103 1.078 1.054 |
Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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