In June, Factory Activity Quickened in Both the United States and Euroland
July 1, 2016
Euroland’s manufacturing purchasing managers index rose by 1.3 points in June, but that quickening rate of activity expansion was exceeded by a 1.9-point advance in the U.S. PMI to 53.2. As a result, the spread between those two measures swung from a minuscule Ezone advantage of 0.2 points in May to a still small U.S. advantage of 0.4 points in June. The U.S. index is compiled by the Institute of Supply Management, while Markit Economics handles the Euroland survey. Markit Economics also prepares a U.S. manufacturing PMI, which weakened 0.1 point to 51.3 in June, so whether the U.S. really improved relative to Euroland last month is somewhat debatable.
The highly followed U.S. purchasing managers index of the ISM exhibited broad improvement last month. Production and orders went up 2.1 and 1.3 points from May levels to solid readings of 54.7 and 57.0. The jobs index recovered from 49.2 in May through the 50 threshold to 50.4, and inflationary pressure receded a bit. In Euroland, all reporting members except France with a PMI of 48.3 had readings above 50, which connotes expansion. The Austrian, German and Greek PMI’s were at 61-, 28- and 25-month highs, and Euroland’s 52.8 score was the best since December. EUR/USD averaged $1.124 for the month of June, somewhat less than in May but more expensive than the euro’s monthly averages had been from early 2015 until recently.
| 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 |
48.4
48.0 48.2 49.5 51.8 50.8 51.3 53.2 |
52.8
53.2 52.3 51.2 51.6 51.7 51.5 52.8 |
-4.4
-4.8 -4.1 -1.7 +0.2 -0.9 -0.2 +0.4 |
1.076
1.090 1.087 1.111 1.114 1.134 1.130 1.124 |
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Tags: Manufacturing PMIs
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