Bigger U.S. Advantage Versus Euroland Last Month in Manufacturing
July 1, 2013
A drop to 49.0 in the U.S. manufacturing purchasing manager index in May had broken a streak of five consecutive readings above 50 — the no change threshold — but a new streak of expansion began in June. The PMI printed last month 1.9 points higher than in May at 50.9. Sub-indices for production, up 4.8 points to 53.4, and new business, up 3.1 points to 51.9, spearheaded the turnaround.
Euroland’s PMI climbed less sharply, gaining 0.5 points, and remained less than 50.0 for a sixteenth consecutive month. A score of 48.8, however, was the best reading in that string of sub-50 readings. Only Germany among the reporting Ezone members declined more quickly in June than July. While the German index fell 0.8 points to a 2-month low of 48.6, the Spanish, Italian and French PMIs rose by 1.9, 1.8 and 2.0 points to 26-, 23- and 16-month highs of 50.0, 49.1 and 48.4.
The U.S. minus Ezone manufacturing differential widened to 2.1 points from 0.7 in May but was only a third as wide as the spread had been in February. A width of 2.1 points also remained less than half as much as the 5.4-point mean spread during the year to April. Activity in manufacturing can be influenced substantially by movements in exchange rates. The euro’s average value of $1.3189 last month was not significantly different from the monthly averages during the previous six months, so forex hasn’t been a dominant driver of differential factory-sector activity in the United States and the euro area.
| Mfg PMIs | U.S. | Euroland | Spread | EUR/USD |
| Jan 2012 | 54.1 | 48.8 | +5.3 | 1.290 |
| February | 51.9 | 49.0 | +2.9 | 1.323 |
| March | 53.3 | 47.7 | +5.6 | 1.320 |
| April | 54.1 | 45.9 | +8.2 | 1.315 |
| May | 52.5 | 45.1 | +7.4 | 1.280 |
| June | 50.2 | 45.1 | +5.1 | 1.254 |
| July | 50.5 | 44.0 | +6.5 | 1.230 |
| August | 50.7 | 45.1 | +5.6 | 1.255 |
| September | 51.6 | 46.1 | +5.5 | 1.286 |
| October | 51.7 | 45.4 | +6.3 | 1.297 |
| November | 49.9 | 46.2 | +3.7 | 1.283 |
| December | 50.2 | 46.1 | +4.1 | 1.313 |
| Jan 2013 | 53.1 | 47.9 | +5.2 | 1.330 |
| February | 54.2 | 47.9 | +6.3 | 1.334 |
| March | 51.3 | 46.8 | +4.5 | 1.295 |
| April | 50.7 | 46.7 | +4.0 | 1.301 |
| May | 49.0 | 48.3 | +0.7 | 1.299 |
| June | 50.9 | 48.8 | +2.1 | 1.319 |
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Manufacturing PMIs
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