Summary and outlook

  • Global leading indicators improved across the board in January, as we have seen a turn for the better in Asia and Europe in particular. US figures continued to improve in both headline and forward-looking details. Global PMI rose for the second month in a row, as Europe got a boost from improving global growth sentiment, driven by among other things the rebound from the flooding in Thailand last autumn.

  • We expect European PMIs to continue increasing moderately, supporting our view that the recession will be short lived. The US has been leading the improvement in global manufacturing over the last few months but there are increasing signs that Europe and Asia are now joining in line with our expectations as outlined in Global Scenarios: Chinese engine set to start pulling again, 17 January 2012.


Details

  • Global PMI new orders in January rose to 51.9, up from 49.3 in the previous month – the highest level in eight months. Thus, signalling some underlying improvement in global manufacturing sentiment.

  • In the US, Manufacturing ISM continued to improve, increasing one point to 54.1. The details were solid as well, with a considerable increase in the new orders component from 54.8 to 57.6. The numbers confirmed that US growth will continue at a moderate pace around 2.5% going into 2012.

  • In euroland, manufacturing PMIs show some signs of improvement, rising for the second month in a row. Though the figures are still in contractionary territory, they send a positive signal, indicating that recession fears are easing. Scandinavian manufacturing PMIs likewise send positive signals, with Norwegian PMI in particular pointing towards an expansion in industrial activity ahead.

  • In Asia, the overall picture has turned brighter, as the rebound from the flooding in Thailand, together with underlying improvement, suggests that the manufacturing cycle has started to turn. In CEE, PMIs remain low but we expect them to improve as eurozone demand recovers somewhat. Brazil PMI improved greatly, moving into expansionary territory.