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Economic data this week

PMI, UK and Euro-zone, August 2013:  The Purchasing Managers Index (PMI) for the UK reached a 2½ year high in August at 57.2 as both output and new orders were rising at their fastest rates since 1994; the overall index was, however, held back by higher costs with raw material prices rising.  Output grew significantly in all sectors, but was led by intermediate goods; the record rate of orders growth, at its highest since August 1994, was mainly in the domestic market, although there was also a solid increase in overseas demand from a wide range of countries/regions.

The report for the euro-zone is similarly upbeat with the overall manufacturing PMI at a 26-month high of 51.4 in August.  Of the 8 countries in the euro-zone report, only France (49.7) and Greece (48.7) have an index below the 50 level which marks the boundary between contraction and expansion;  Germany had a 25-month high reading of 51.8 and the series was led by the Netherlands where the index was 53.5 (a 27-month high for them).  The growth rates for production, new orders and new export business all accelerated at their fastest rates since May 2011 and the new orders to inventory ratio hit a 28 month high.

Elsewhere in Europe, the trends are generally positive with PMI’s above 50 and rising compared to July being recorded in the Czech Republic, Poland and Turkey - only Russia is relatively weak with a PMI of 49.4.  The situation in Asia is not nearly as good, with most of the major economies reading at or below 50, albeit with a mixture of rising and falling numbers; the major exception is Japan where the PMI increased significantly to 52.2 for August. We end this world tour on a more positive note with strong figures for the USA (53.1) and Canada (52.1) and although Mexico (50.8) and Brazil (49.4) are lower, they are both on a rising trend compared to July.

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.

UK Manufacturing Output, July 2013:  Data from the Office for National Statistics (ONS) shows that manufacturing output in the latest three months (May, June and July 2013) was +0.9% higher than in the previous three months (February, March and April 2013), but fell by -0.5% compared to a year ago.

Looking in a little more detail, output of capital goods  in the latest 3 months was +1.1% higher than in the previous 3 months and grew by +1.5% compared to a year earlier;  the latter figure is the fastest growth rate among the major elements of manufacturing, although production of consumer durables expanded more rapidly on the 3 month comparison.

Among the industries of most interest to the manufacturing technology sector, the star performer was the Automotive sector where output grew by +3.1% compared to the previous 3 months and by +6.7% on a year earlier;  Aerospace output expanded by +1.1% and +8.3% respectively.  There is less positive news from the other two sectors we usually focus on with the manufacture of Machinery growing by +0.8% compared to the previous 3 months, but still -13.1% lower than a year earlier;  the Metal Products sector continues to lag behind the others, with production falling by -1.4% and -5.1% respectively.

You can download the ONS Statistical Bulletin and dataset from their web-site at www.ons.gov.uk or request it from MTA.

European GDP, 2nd Quarter 2013:  Eurostat has released its second estimate of GDP data;  this shows an increase, compared to the 1st quarter of the year, of +0.3% for the euro-zone and +0.4% for the EU27 as a whole.  Looking back over 12 months, GDP in the euro-zone has fallen by -0.5%, but is unchanged for the EU27 overall.

With data for 4 countries not yet available for the 2nd quarter of 2013, although the 2nd phase of the recession has now ended for the region as a whole, there are 5 countries (Spain, Italy, Cyprus, the Netherlands and Slovenia) which are still in recession.

The Eurostat News release is available on request from MTA or from the Eurostat web-site.

US Cutting Tool Consumption, June 2013:  Alongside the reports on the market for manufacturing technology, our colleagues at AMT have, alongside the US Cutting Tool Institute (USCTI), introduced the Cutting Tool Market Report (CTMR) which tracks shipments values for cutting tools in the USA, regardless of source.  The data, which is based on the figures for companies who report via this system (estimated to account for about 80% of the total market), shows a total of just over US$1 billion for the first half of 2013, -8.2% lower than in the same period of 2012, but it is above the level recorded for the 2nd half of 2012, so it points to an improvement for the year as a whole.  The AMT News release is available on their web-site at www.amtonline.org.