Bigger Spread in June Between U.S. and Euroland’s Manufacturing Purchasing Managers Indices

July 1, 2020

The ISM-compiled U.S. purchasing managers index (52.6) and the IHS-compiled Euroland PMI of 47.4 both rose to four-month highs in June. The U.S. index increased 9.5 points, 1.5 points more than did the Ezone PMI, and there was an additional significant attribute to the U.S. widening advantage last month. At 47.4, conditions in Euroland manufacturing merely deteriorated more slowly than in the prior three months, and June extended the streak of months in which conditions deteriorated to 17.

The U.S. purchasing managers index not only reached a 4-month high but in doing so moved above 50 for only the third time in 11 months. Readings of 50 represent the line between  deterioration and contraction from improvement and expansion. Moreover, increases in output of 24.1 points to 57.3 and demand of 24.6 points to 56.4 show even sharper rises in those two critical measurements of the manufacturing sector. A separate U.S. manufacturing purchasing managers survey conducted by IHS went up 10.0 points to 49.8, a 4-month high.

One cloud hanging above the solid U.S. advantage in manufacturing vis-a-vis Euroland concerns the euro, which depreciated to its softest monthly average in a year during June. There is a big export component in manufacturing, and the euro’s decline if sustained would enhance Euroland’s price competitiveness.

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

November

December

Jan 2018

February

March

April

May

June

July

August

September

October

November

December

Jan 2019

February

March

April

May

June

July

August

September

October

November

December

Jan 2020

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

57.6

56.8

55.3

55.5

56.7

56.5

59.3

60.2

58.5

58.2

59.3

59.1

60.7

59.3

57.9

58.7

60.0

58.4

60.8

59.5

57.5

58.8

54.3

56.6

54.2

55.3

52.8

52.1

51.7

51.2

49.1

47.8

48.3

48.1

47.4

50.9

50.1

49.1

41.5

43.1

52.6

 

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

60.1

60.6

59.6

58.6

56.6

56.2

55.5

54.9

55.1

54.6

53.2

52.0

51.8

51.4

50.5

49.3

47.5

47.9

47.7

47.6

46.5

47.0

45.7

45.9

46.9

46.3

47.9

49.2

44.5

33.4

39.4

47.4

 

 

-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

+2.2

+0.6

-1.4

-1.5

-0.7

-0.1

+1.9

+2.1

0.0

-1.9

-1.3

-0.5

+2.1

+2.7

+1.7

+3.2

+5.1

+3.3

+6.2

+6.3

+5.5

+7.0

+2.9

+6.1

+4.9

+7.8

+4.9

+4.4

+4.1

+4.7

+2.1

+2.1

+2.4

+1.2

+1.1

+3.0

+0.9

+4.6

+8.1

+3.7

+5.2

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

1.174

1.184

1.220

1.234

1.234

1.227

1.181

1.167

1.169

1.155

1.166

1.148

1.136

1.138

1.142

1.135

1.130

1.123

1.118

1.130

1.121

1.112

1.101

1.106

1.105

1.111

1.110

1.091

1.105

1.087

1.091

1.126


Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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