• Global leading indicators continued to improve over the past month with further rises in PMI and improvement in the balance between orders and inventories. A rapid decline in inventories means production will soon have to rise in order to meet demand. In fact production plans in Japan already point to rising production in March and April. Metal prices have increased further. However, the Baltic Freight Index has declined slightly.
• In the US the ISM index surprised on the upside and details of the report showed a strong increase in the new orders index. Euroland PMI also surprised positively but as expected the improvement is happening more slowly here.
• Emerging markets continue to do better. China PMI from CLSA fell slightly but the PMI from NSA continued to rise. Export and production data in several Asian countries have continued the improvement seen in previous months. PMI in Central and Eastern Europe and Russia also managed to rise further - despite the region's financial problems.
• We continue to expect further improvement in leading indicators going forward as stimulus should improve demand and inventories have become very lean globally.
• The next issue of our Business Cycle Monitor will be published on May 6, 2009.
