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PMI

 

We covered the UK Purchasing Managers Index (PMI) for the manufacturing sector in last week’s edition but as a reminder this showed the lowest figure recorded since the survey started in 1992 at 32.6 with orders, output and employment having survey record contractions.  It is also worth remembering that the manufacturing sector PMI includes an assessment of both stocks of purchases and supplier delivery times;  increases of these are treated as a sign of increasing activity when, in the current situation, they have happened for exactly the opposite reason.  This means that the manufacturing PMI does not fall as low as it should and appears to be less severely hit than the service sector indicators.

The Euro-zone PMI fell to 33.4 in April with six of the eight countries included in this calculation also seeing the index in the 30’s - the exceptions were Greece (29.5) and Netherlands (41.3).  This points to broadly similar timing across the region although it is worth noting that France and Italy had a weaker reading in March than some of their neighbours (and are lower than Germany in April) while Spain, which was still above 50 in February and had a March reading of 45.7, fell the most in April to 30.8.

In the other seven European countries that we track each month we see a similar picture with sharp fall in the PMI in most countries to a figure in the 30’s.  There are, however, a couple of exceptions;  Switzerland only saw a modest reduction from 43.7 in March to 40.7 in April although it is worth noting that this is the 13th consecutive PMI reading below 50;  the other exception was Hungary which was the only country to see the PMI “improve” in April - the use of the inverted commas highlights the fact that it reached 33.6 and the uptick probably only comes about because Hungary had by far the weakest reading in March (29.1).

The four countries in the Americas (Brazil, Canada, Mexico and the USA) have a similar trend with the high 40’s readings of March dropping to something in the mid-30’s in April;  Canada was the weakest in the latest data at 33.0.

Finally, it is in Asia that we see some interesting divergence in the trends.  China, which had the earliest dip in its PMI reading with a reading in February of 40.3, did see a marginal drop in April (to 49.4 from 50.1 in March - the April figure is the best amongst the countries and regions that we track) following the recovery in March (50.1) but it has not seen the PMI in the 30’s.  They are joined in that position by Japan, South Korea and Taiwan;  the April PMI reading for all of these is in the low-40’s.  This is in sharp contrast to the ASEAN region where the PMI fell to 30.7 having already been in the low-40’s in March and, in particular to India which had the lowest manufacturing PMI in April at 27.4, having had the strongest reading in March (51.8).

The IHS Markit PMI reports for major economies around the world are available from their web-site at http://www.markiteconomics.com/Survey/Page.mvc/PressReleases;  we have compiled a set of summary charts which is available to download below.

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