PMI, UK, Euro-zone and Global, April 2016: The manufacturing Purchasing Managers Index (PMI) for the UK fell to its lowest level since February 2013 in recording its first negative trend for 3 years at 49.2. While no-one was expecting strong growth, this still came as something of a surprise; both production and new orders were lack lustre and the index was turned negative (i.e. below 50) by a fall in both employment and stocks of purchases. From a chart in the report, investment goods looks to be about the same as manufacturing overall, while consumer goods is the weakest of the major sub-sectors. There were also some reports of uncertainty regarding the oil & gas industry, the retail sector and the EU referendum.
The euro-zone edged up fractionally to 51.7 (from 51.6 in March) and although it is at least signalling growth, the pace remains only modest. Germany (51.8), Italy (53.9) and Spain (53.5) all did better than in March, but the main concern remains France where the index was only 48.0, sharply down on the March figure which was already below 50; here, both new orders and production fell at their fastest rate for a year or more with weak domestic demand combining with the worst decline in new export orders for over 3 years.
Elsewhere in the world, 3 of the 5 major Asian economies were in negative territory and Korea only managed an index of exactly 50 - the exception was India, but even here the reading of 50.5 was well down on the March number. In non-Euro-zone Europe, Russia and Turkey both saw their negative numbers in March weaken a little further and while Poland and the Czech Republic were above 50, they also had a worse outcome than in the previous month. There was a similar trend in both the USA and Mexico and while Brazil weakened even further to crisis levels, Canada was the only non-European country among those that we track where an already positive reading improved in April.
All of the Markit PMI reports for major economies around the world are available from their web-site at http://www.markiteconomics.com/Survey/Page.mvc/PressReleases.
European GDP, 1st Quarter 2016: At the end of last week, Eurostat issued its first flash estimate for the European economy; this showed that Euro-zone GDP grew by +0.6% compared to the 4th quarter of 2015, with growth of +0.5% for the EU28 as a whole. This makes the annualised rate +1.6% for the Euro-zone and +1.7% for the EU28.
You can download the Eurostat Press Release from their web-site at http://ec.europa.eu/eurostat or request it from MTA.
CECIMO Statistical Toolbox, April 2016: The latest edition of the CECIMO Toolbox summarises some key economic data for Europe, reports on an increase in machine tool exports from the CECIMO countries in 2015 and has the latest reading of MT-IX, CECIMO’s own track of share prices for publically quoted machine tool manufacturing companies around the world.
You can download the CECIMO Toolbox from their web-site at www.cecimo.eu or request it from MTA.
BEAMA Contract Price Adjustment Service: Do you have long-term contracts, either with customers or suppliers? Have you thought about incorporating something in the contract that allows you to adjust the price according to changes in input costs?
On behalf of members, MTA subscribe to a service provided by our colleagues at BEAMA which gives a monthly track of key indices on labour and materials costs. Of course, you need to get the principle and the relevant formulas included in the contract, but this gives you a way of updating the relevant prices independently.
If you would like more details on this, please contact Geoff Noon (firstname.lastname@example.org) at MTA; we can send you a copy of the latest report and some typical formulae and can have a discussion about whether or not this would be useful for you.