Similar October Manufacturing PMI Indices in U.S. and Euroland

November 2, 2017

It was reported today by IHS Markit that Euroland’s manufacturing purchasing managers index rose 0.4 points to an 80-month high of 58.5. Being above 50 since July 2013 means that conditions in manufacturing have been improving since then, and the higher level in October means that the rate of improvement quickened last month. This faster pace was driven by demand and employment. The sub-index for production fell in October, and an increased in unfilled orders suggests the development of a problem of keeping up with the accelerating pace of new demand. Input and output price inflation understandably picked up in October.

It was reported yesterday that the U.S. manufacturing PMI compiled by the Institute of Supply Management fell back 2.1 points to a 3-month low of 58.7. Production and orders dropped by 1.2 points, and prices declined 3.0 points. The point spread between the U.S. factory PMI and Euroland’s consequently dropped from 2.7 in September (60.8 minus 58.1) to 0.2 in October. Manufacturing is doing quite well in both economies, but the relative advantage enjoyed by the United States in both August and September has been mostly squandered. Conditions in manufacturing are influenced heavily by export competitiveness. It’s not surprising to see that the euro’s average value in October of $1.176 was less than in August or September.

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

July

August

September

October

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

56.3

58.8

60.8

58.7

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

55.2

55.4

56.2

56.7

57.0

57.4

56.6

57.4

58.1

58.5

 

-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

-0.3

+1.4

+2.7

+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

1.063

1.064

1.069

1.072

1.106

1.124

1.153

1.182

1.191

1.176

 

Copyright 2017, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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