PMIs paint a positive picture with US streaking ahead – Capital Economics
|"The advanced economy flash PMIs for April painted a positive picture, albeit with recoveries in the US and UK seemingly far outpacing those in the euro-zone and Japan as restrictions were relaxed in the former two economies," noted Gabriella Dickens, Global Economist at Capital Economics.
Key quotes
"Flash PMI estimates suggest that the DM composite PMI edged up from 55.9 in March to over a 14-year high of 57.5 in April. The increase was broad-based, with rises occurring in all four major advanced economies. Given that restrictions started to lift in the UK and the US, it was little surprise that the largest rises occurred there. The smaller rise in the euro-zone composite PMI was harder to explain given that restrictions were tightened at the end of March."
"The headline manufacturing PMIs were generally boosted by longer suppliers’ delivery times, as supply continued to struggle to keep up with demand. Those shortages are exerting upward pressure on prices. Developed market averages of both the input and output price indices of the composite flash PMIs surged to record highs this month."
"Note, however, that there have been marked differences in the extent to which higher input prices are being passed through to output prices, particularly in the services sector. While the services output price index for the US is at an extremely high level, the euro-zone equivalent is only roughly in line with its ten-year average."
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