Erste Bank Research Team
Erste Bank
Flash estimates of April manufacturing PMIs for major countries were released this week. In Germany, the poll data rose slightly and remains unchanged well above the growth threshold level of 50. The value for April, however, is slightly below the average reading of 1Q14, thus indicating somewhat lower growth rates. But recent data seems to indicate that the German economy benefited from positive weather conditions (a mild winter) in 1Q14. This is clearly visible in the significantly increased seasonallyadjusted output of the construction sector in January and February. The Bundesbank thus mentioned in its recent monthly report that that, due to this temporary effect, it expects a lower growth rate for the German economy for 2Q14. With regards to France, the manufacturing PMI poll data dropped slightly. However, we do not consider the PMI data to be a reliable indicator for the French economy. The INSEE business-climate – the more reliable indicator – remained stable, as in March.
The manufacturing PMI survey data for the entire Eurozone rose slightly, clocking in at 53.3. The current level is stable when compared to the average for 1Q14, thus indicating stable growth rates. The Eurozone composite value for April – a measure that also takes into account the service sector, for which the poll data is up slightly – rose to a level of 54.0, thus confirming the continued recovery of the Eurozone economy. Geographically, the poll data shows a positive development on a broad basis.
Globally, the situation remains diverse. In China, the manufacturing PMI value remained at a weak level of 48.3. Any protracted weakness of China’s economy would be a downside risk for German exports to Asia, given that these account for a significant share of total exports. However, due to the stable German export growth to China of around 11% so far this year (based on export data for January and February), no such weakness is visible in the data yet. In the US, the picture remains far better and the poll data for March for the manufacturing industry improved slightly to a reading of 53.7.
This document is intended as an additional information source, aimed towards our customers. It is based on the best resources available to the authors at press time. The information and data sources utilised are deemed reliable, however, Erste Bank Sparkassen (CR) and affiliates do not take any responsibility for accuracy nor completeness of the information contained herein. This document is neither an offer nor an invitation to buy or sell any securities.
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