Flash Purchasing Managers Index, February 2024:  For the UK at least, the optimism of having the Purchasing Managers’ Index (PMI) for the manufacturing sector tick above the crucial 50 level may have proved to be fleeting with the flash estimate falling back to 48.7.  Just as the positive trend in March had been driven by an increase in output, so the dip for April was mainly due to this element of the index returning to negative territory.  Manufacturing orders continue to decline, especially for overseas business where respondents in our sector noted weak sales to European clients.  We will need to wait for the final data next week to see if suppliers’ delivery times has had any impact on this weakness in the PMI.

The picture in the Euro-zone is also weak with the overall manufacturing PMI falling back to 45.6, despite a less negative output element – this part of the calculation was at its highest for 12 months, although still pointing to a fall in activity.  The overall index fell because of an acceleration in the rate of decline for new orders and this has now been negative (i.e. below 50) for two years.  There is also a negative impact on the overall index from a further shortening in suppliers’ delivery times as a result of fewer shipping delays and a reduction in purchasing of inputs in the region.

We have separate reports for France and Germany, with small movements in opposite directions being recorded.  In France, the manufacturing PMI slipped back to a 3-month low of 44.9, with output also more negative than in March but for Germany, the overall index edged up to 42.2 as output was also less negative than last month.  The pace of decline in new orders accelerated in both countries and employment in the manufacturing sector was also down.

In Asia, indeed globally, India continues to be the star performer with the flash manufacturing PMI stable at 59.1;  output and orders remain strong and purchases of inputs increased to a 10-month high.  There was also a better reading for both Japan and Australia with both countries recording a flash value of 49.9, with output leading the way in both cases;  there was also a parallel deceleration of the decline in orders but while employment fell more slowly than in March in Australia, it grew in Japan.

Finally, the USA made it three countries with a flash manufacturing PMI at 49.9, just dipping back below the threshold for the first time since last December.  While output continued to grow, this was at is slowest pace since January but the index was helped down by a further shortening of suppliers’ delivery times and orders fell, although there was a modest increase in employment.

These reports are available on the “PMI by S&P Global” website at https://www.pmi.spglobal.com/Public/Release/PressReleases or on request from MTA.


USMTO and CTMR, February 2024:  The US Manufacturing Technology Orders (USMTO) programme tracks orders in the US market, based on the reports from participants.  For the first two months of the year, orders are -16.9% lower than in the same months of 2023, although it should be noted that the 1st quarter of last year was still at a relatively high level and significantly better than the rest of the year.

The AMT Press Release on these results notes that orders from contract machine shops continue to fall but that manufacturers of engines, turbines & power transmission equipment placed business at their highest level since February 2023.  Demand from the aerospace sector was also strong with improvement plans announced for the F-35 programme.  An end-of-financial-year boost is expected in March and the industry is looking forward to the IMTS exhibition in September.

The stark divergence between the regions continues with growth in the first two months of the year in the South-East (+40%), North-Central-East (+28%) and West (+15%) being outweighed by declines in the North-Central-West (-39%), North-East (-31%) and South-Central (-16%) regions.

The US Cutting Tool Market Report (CTMR) tracks the tooling business on a similar basis to that for machine tools and in the first two months of 2023, orders were +6.5% higher than the same period last year.  More significantly, the rolling 12-month total is now above the level seen in March 2019, which was the previous peak in this cycle, although inflation is, of course, part of this story.  There is some caution about the short-term outlook with the aerospace industry (Boeing) in a “challenging period”, automotive manufacturers facing the rise of electric vehicles and elections on the horizon.  There is no regional breakdown of the cutting tool data.

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.

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