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PMI, UK and Euro-zone, April 2019:  The Purchasing Managers Index (PMI) for the UK manufacturing sector fell as anticipated, but, perhaps surprisingly, only to 53.1 which still indicates a good level of expansion in activity.  With pre-Brexit stock-building dominating the last couple of months, the weaker growth in production, orders and stock of purchases had been expected, but it seems from the report, there was still some stock-building going on in April with a further substantial expansion in holdings indicated in the data.  There was a slowing in new orders growth with export orders falling at their fastest rate in 4½ years and employment in the sector fell for the 3rd time in the past 4 months.

The picture in the Euro-zone remains weak, although slightly less so than in March; the index of 47.9 means that it has been in negative territory (below 50) for three months.  Perhaps more worryingly, the survey indicates that it is the investment and intermediate goods sectors that are the main cause of the problem, while consumer goods continue to expand.  Five of the eight Euro-zone countries covered saw a better reading in April than in March, but at 44.4, there was only a marginal improvement in Germany and it remains bottom of the pile.  Both orders and output fell again there, although not quite as fast as in March, and there was another fall in employment;  it seems that the problems in the automotive industry are at the core of the problem, at least for new orders.

Looking at the rest of the world, there is a mix of both better and worse PMI readings compared to March, as well as countries both above and below 50, so we will just look at the main movers this time.  The best improvers in the April numbers were Hungary (up to 54.9 from 52.5 in March) and South Korea which crossed the 50 mark for the first time since last October with its reading of 50.2.

The most significant decline in April was in Switzerland where the PMI fell to 48.5, taking it into negative territory for the first time since November 2015 - this is not surprising given the strong links between the manufacturing sector in Switzerland and Germany.  Although Canada had a smaller reduction in its PMI reading, this also took it below 50, in this case for the first time since February 2016.  The other countries with significant (1 point or more) fall in their PMI were Russia, Sweden and Brazil, but all of these remained in positive territory.

The IHS Markit PMI reports for major economies around the world are available from their web-site at or we have a summary report of charts which is available from MTA (contact Geoff Noon -

CBI Industrial Trends Survey, April 2019:  The latest results from the CBI survey suggests that manufacturing activity growth remains modest, with output picking up a little in the 3 months to April.  Within this, 12 of the 17 sub-sectors were positive, led by chemicals and mechanical engineering (machinery);  however, respondents to the survey expect this to be short-lived with the expectation that output would be broadly flat in the next 3 months.

In part, this reflects the record growth in stocks that was recorded in the survey with an unprecedented acceleration over the 3 months to April;  this was seen across the board with increases in stocks of raw materials, work in progress and finished goods.  Over the next 3 months, these stocks are expected to fall.

Total new orders grew slightly in the latest 3 months, driven by domestic demand, with export orders level.  For the coming 3 months, both home and export orders are expected to fall, with expectations for overseas demand at their lowest since 2009.  There is further evidence of the impact of Brexit uncertainty with the number of firms citing political/economic conditions as limiting exports at its highest since January 1983 and the number expressing concerns about delivery dates limiting export orders at its highest since January 1975.

This was one of the longer quarterly surveys that gives us a new reading on investment intentions;  these were marginally less negative than in the two previous surveys for spending on plant & machinery in the coming 12 months, but still well below the long-run average.  At the industry level, the 4-quarter moving average of investment in plant & machinery over the next 12 months weakened for transport equipment, mechanical engineering and metal products and unless there is a turn-round over the summer, a further weakening is likely with the figures for July 2018 having been reasonably positive.

You can see the CBI Press release on their web-site at (published on 26 April) or request it from MTA;  we can also send a brief summary of the results.

European GDP, 1st Quarter 2019:  The preliminary flash estimate of European GDP from Eurostat shows that the Euro-zone economy was +0.4% larger than in the final quarter of 2018, with the EU28 growing by +0.5%.  These figures represent an acceleration on the rates that we saw in the 4th quarter of 2018 - those were +0.2% and +0.3% respectively.

However, despite the improvement in the quarter-on-quarter growth rates, the annualised rates of growth were unchanged from the end of 2018 with an increase of +1.2% for the Euro-zone and +1.5% for the EU28.  There is no country detail in this release - that will come in the flash estimate that will be published on 15th May.

You can download the Eurostat News Release from their web-site at www. (30 April) or request it from MTA.