European Industrial Production, November 2018: The data published by Eurostat makes gloomy reading with total industrial production (mostly manufacturing, but also including the output of utilities and extraction industries) falling by -1.7% compared to October for the Euro-zone and by -1.3% for the EU28. Looking back 12 months to November 2017, Euro-zone industrial production fell by -3.3%, with a reduction of -2.2% in the EU28.
There is more concern in the detailed figures with the Capital Goods sub-sector seeing the largest month-on-month falls at -2.3% in the Euro-zone and -1.6% for the EU28. The view back over 12 months is similar with reductions of -4.5% and -3.0% respectively - the only difference is that the Energy sub-sector had larger declines on this comparison.
There are some clues to where the problems lie in the country figures; on the comparison with November 2017, of the 25 Member States for whom the figures have been published, total industrial production grew in 15 and fell in 10. In the latter group, the largest reductions were in Ireland (-9.1%) and Germany (-5.1%), with France Italy, Spain and the UK all sharing in the negative trend – given the close economic ties, especially with Germany, this will probably affect some of the countries that still had growth, including the likes of Poland, Hungary and the Czech Republic. For the record, the strongest growth on the 12-month comparison was in Estonia (+7.9%), Poland (+5.3%) and Hungary (+3.5%).
You can download the Eurostat News Release from their web-site at www. http://ec.europa.eu/eurostat (14 January) or request it from MTA.
USMTO and US CTMR, November 2018: The US Manufacturing Technology Orders (USMTO) programme tracks orders in the US market, based on the reports from participants. In the first 11 months of 2018, manufacturing technology orders are reported to be running +22.4% higher than in the same period of 2017 (January to November); the rolling 12-month trend (the total for the past 12 months compared to the previous 12-month rolling total) is up by +18.7%.
The pace of growth has slowed somewhat compared to the break-neck speed that was seen in August and September - only the latter is IMTS driven - but it remains healthy; AMT are expecting 2019 to settle down to single-digit growth through most of the year, although some slowing is almost inevitable towards the end of 2019.
For confidentiality reasons, we don’t have the full data for all of the regions, but the results for metal cutting machines (by far the largest part of the market covered by the USMTO) are published; they continue to show double-digit growth in all six regions ranging from +11% in the North-Central-East up to +35% in the South-East area.
The US Cutting Tool Market Report (CTMR) is similar in concept, although it tracks sales rather than orders. In the first eleven months of 2018 cutting tool sales grew by +12.9% compared with January to November 2017 and the 12-month rolling trend is at +12.6%. There is no regional breakdown in this report.
You can download the press release for the USMTO from the AMT web-site at www.amtonline.org, with the CTMR release published on the USCTI web-site at www.uscti.com; alternatively, you can request either or both releases from MTA and we can make sure you get them when they are published each month.
Euro-zone Investment and Profitability, 3rd Quarter 2018: Data from Eurostat shows that the business investment rate (gross fixed capital formation divided by gross value added) in the Euro-zone stood at 23.3%; this is slightly higher than the 23.0% in the 2nd period of the year and up on the 22.4% a year earlier. Apart from a spike in the 2nd quarter of 2015, this is the highest rate since the 3rd quarter of 2008.
In contrast, the business profit share (gross operating surpluses divided by gross value added) continued its modest decline with the Q3-18 figure standing at 40.3%, down from the 40.6% in the 2nd quarter and 41.3% a year earlier. Coupled with the worrying output data, this does not suggest that the improvement in investment is likely to continue through 2019.
You can download the Eurostat News Release from their web-site at www. http://ec.europa.eu/eurostat (11 January) or request it from MTA.