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Global: Business Cycle Monitor

Wed, May 6 2009, 09:42 GMT
by Allan von Mehren

Danske Bank A/S


  • Global leading indicators continued to improve in April. The development points to a rather synchronous recovery with improvement in leading indicators in all regions.
  • Global PMI (new orders) rose from 37 to 43 and although it is still below 50 – and thus points to contraction – it has risen rapidly after bottoming at 27.4 in December last year. The balance between inventories and orders continued to improve and points to a significant further rise in PMI in the coming months.
  • Asia in particular has shown strong recovery signs. PMIs are rising above 50 and hard data for exports and production has risen. This is not least the case in China, South Korea and Japan.
  • In the US, ISM manufacturing has continued its march higher, driven by further increases in new orders.
  • Euroland PMI and German ifo also surprised positively. As domestic demand has stayed very subdued, the improvement is probably related to improvement on export markets.
  • In Russia and Central and Eastern Europe, PMIs have also continued higher. Russian PMI new orders has risen for four months now to 43.9 after bottoming at 28.6 in December.
  • Outlook: We continue to look for further improvements in leading indicators in the coming months. Lean inventories in combination with demand being lifted by substantial stimulus will pave the way for increases in production. We start to see upside risk to Q3 growth.

Published on  Wed, May 6 2009, 09:45 GMT


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