European Industrial Production, November 2021: The data for Europe published by Eurostat covers industrial production; most of this is manufacturing output but it also includes the extraction industries (mining & quarrying) and utilities (supply of electricity, gas & water). The headline figures show an increase of +2.3% for the Euro-zone compared to October 2021, although this still left total industrial production -1.5% lower than a year earlier (November 2020). For the EU as a whole, the month-on-month growth was +2.5% which meant that the level was the same as a year earlier.
The data is broken down by sector and for the Euro-zone, output of the capital goods industries was +1.5% higher than in October 2021 but -9.8% lower than a year earlier in November 2020. The trends for the EU overall were similar with month-on-month growth of +2.3% still leaving output in November 2021 -8.2% lower than a year earlier. It is worth noting that the capital goods industries is the only sector to have seen output lower than a year earlier – all of the other sectors are higher.
Looking at the 12-month trends by country, of the 25 Member States who have published data (Cyprus is missing and the Italian data has been classified as confidential), 19 were higher than in November 2020 and 6 were lower. Discounting Ireland where total industrial production was -30.4% lower than a year earlier thanks in part to some revisions and amendments to the seasonal adjustment (as well as having a relatively large pharmaceutical sector), the most significant reduction were in Malta (-7.8%), Germany and Luxembourg (both -2.5%). The largest increases in output were in Lithuania (+17.0%), Poland (+15.3%) and Bulgaria (+13.3%).
You can download the euro-indicators bulletin from the Eurostat website at https://ec.europa.eu/eurostat/news/euro-indicators (12 January) or request it from MTA.
European Commission Economic Sentiment Indicator and Capacity Utilisation, December 2021: The European Commission (EC) draws from a range of surveys to construct confidence indicators for six sectors of the economy and then uses five of these to compile its Economic Sentiment Indicator (ESI) – financial services is not included in the ESI. Because of the data collection periods, although published as “December”, it really refers to the previous month – in this case November.
The overall ESI for both the Euro-zone and the EU as a whole eased significantly in the latest reading, although by historical standards it remains strong. However, this was driven by a sharp fall in confidence for services, with more modest reductions for retail trade and consumer confidence in the face of the Omicron wave while confidence improved a little in both the industry and construction sectors.
For industry this meant that the confidence figure was at its highest on record and came about as indications of current order books reached an all-time high along with an uptick of the scarcity of stocks of finished products – expectations for output over the coming 3 months were stable at a high level. Although not included in the confidence calculation there was a marked improvement in production levels over the previous 3 months but the assessment of export order books fell back slightly from the record that was recorded in the previous month.
Among the larger EU economies, only Poland registered a modest increase in its ESI, with a sharp fall for the Netherlands and smaller but still significant declines in Germany, France and Italy, while Spain had a more modest reduction. The ESI is calculated as an index with the average from 2000 to 2020 as the basis point; therefore, readings below 100 indicate that the ESI is below average. In the latest reading, this only applies to the Czech Republic, Latvia (marginally), Malta and Slovakia although among the candidate countries which are also part of this survey, this also applies to North Macedonia and Turkey.
You can download the EC report and the statistical annex from their web-site at https://ec.europa.eu/info/business-economy-euro/indicators-statistics/economic-databases/business-and-consumer-surveys/download-business-and-consumer-survey-data/press-releases_en or it can be requested from MTA.
USMTO and CTMR, November 2020: The US Manufacturing Technology Orders (USMTO) programme tracks orders in the US market, based on the reports from participants. In the first eleven months of 2021, orders were +58% higher than for the same period in 2020 (January to November) and are on-track to break the all-time record for the calendar year. The November figure of $650 million is the second highest monthly total on record and only the 5th time it has been above $600 million since the series started in 1998.
Based on the figures for metal cutting machines (which account for nearly 98% of the total value), all six of the regions have seen exceptional growth over the first 11 months of 2021. These trends range from +84% in the North-Central-West and +82% in the South Central regions down to “only” +42% in the South-East.
The US Cutting Tool Market Report (CTMR) tracks orders for tooling on a similar basis; for the period of January to November 2021, cutting tool consumption is running at +8% higher than the same months of 2020. This is not really accelerating in the same way as the machinery market, with the November total seeing a fall compared to October. While the accompanying press release does not give an explanation it does hint that the chip shortage continues to limit the automotive industry and that the Omicron variant may be having an impact on output (although this data is mostly from before the current surge in infections). There is no regional breakdown in this report.
You can download the press releases for the two surveys from the AMT web-site at www.amtonline.org/topic/intelligence, with the CTMR release also 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.