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ECONOMIC DATA THIS WEEK

PMI, UK and Euro-zone, May 2014:  The Purchasing Managers Index (PMI) for the UK continues to run at a high level with the May reading of 57.0 just a fraction lower than the previous month (April was 57.3).  The headline number from the survey has now signalled expansion of the UK manufacturing sector in every month since March 2013.  The growth remains broadly based with output and new orders growing in all the major elements, with the report noting specifically that “investment goods producers saw an especially marked acceleration in the rate of increase in new orders, representing a positive bounce following slower demand growth in March and April”.

The PMI reading for the euro-zone was 52.2, lower than the 53.4 recorded in April, but still signalling a reasonable rate of growth.  Compared to April, the Netherlands and Spain saw an increase in their PMI reading and, although the others were lower, only France fell back below the 50 mark that defines the boundary between expansion and contraction.  Within the euro-zone, both output and new orders in the manufacturing sector expanded for the 11th consecutive month, although the pace of growth was at its slowest since November 2013 in both cases.

Elsewhere in the world there is a mix of trends both within and between the regions.  In Asia, China, Japan and Korea were all just below the 50 level while India and Taiwan were stable at 51.4 and 52.4 respectively;  In Europe, Russia was up slightly at 48.9, Turkey (50.1) and Poland (50.8) had slipped back from their April readings, while the Czech Republic was racing ahead with the PMI increasing from 56.5 in April to 57.3 in May;  the USA saw a similar increase with their May PMI reaching 56.4, while Canada (52.2) and Mexico (51.9) were stable at a more modest, but still positive, level - the weakest market in the Americas was in Brazil where the PMI fell to 48.8 in May (49.3 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 2014:  The 2nd estimate of GDP from Eurostat shows quarter-on-quarter growth of +0.2% in the euro-zone and +0.3% for the EU28 as a whole;  compared with a year ago, GDP has increased by +0.9% in the euro-zone and by +1.4% in the EU28.

Among the 23 member states for which the data is available, compared to the previous quarter, GDP grew in 13, was unchanged in 2 and fell in 8;  the largest reduction was in the Netherlands (-1.4%) which is affected by the warmer weather reducing sales of gas and the fastest growth was in Hungary and Poland (both +1.1%).  The only member states which are in recession (defined as two consecutive quarters of non-positive growth) are Cyprus and Finland, although the quarterly data is not yet available for Ireland or Croatia which both saw a fall in GDP at the end of 2013.

You can get the Eurostat News Release from their web-site at http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ or request it from MTA.