Strong Factory Growth in Both the U.S. and Euroland
July 3, 2017
In June, U.S. manufacturing overcame a disadvantage relative the the euro area in a single month, as the euro advanced to its strongest monthly average in a year against the dollar. The U.S. Institute of Supply Management reported a 2.9-point increase in the manufacturing purchasing managers index to 57.8, signifying the strongest rate of improvement in the sector since October 2014. Production, orders, and employment sub-indices in the latest survey recorded month-on-month increases of 5.3, 4.0 and 3.7 points, and this broadly faster activity was accompanied by a decelerating rate of inflation, as the prices index dropped 5.5 points to 55.0.
According to Markit Economics, manufacturing activity also improved in the euro area. The manufacturing PMI for the region rose 0.4 points in June to a reading of 57.4. That score represents a 74-month high and indicates that factory sector conditions were improving in June at almost as rapid a pace as in the United States. The French PMI was a full 1.0 point better than in May. The German and Italian individual PMI readings edged up 0.1 point, and Spain’s index fell 0.8 point.
Markit Economics also compiles a U.S. purchasing managers index for manufacturing, which usually dovetails with the ISM index at least in direction if not magnitude. But that wasn’t the case for June, which casts some doubt on how representative the ISM-reported improved activity may actually be. The U.S. factory PMI from Markit Economics fell 0.7 points in June to a reading of 52.0.
| 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 Jan 2017 February March April May June |
48.4
48.0 48.2 49.7 51.7 50.7 51.0 52.8 52.8 49.4 51.7 52.0 53.5 54.5 56.0 57.7 57.2 54.8 54.9 57.8 |
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 55.2 55.4 56.2 56.7 57.0 57.4
|
-4.4
-4.8 -4.1 -1.5 +0.1 -1.0 -0.5 0.0 +0.8 -2.3 -0.9 -1.5 -0.2 -0.4 +0.8 +2.3 +1.0 -1.9 -2.1 +0.4 |
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 1.063 1.064 1.069 1.072 1.106 1.124 |
Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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