The United States reported its sharpest rise in production levels since February 2011, while the United Kingdom and Czech Republic also ran near peak performance levels during May, according to statistics released this by Markit Economics. However, there were only a few other significant examples globally of hot or even mildly encouraging growth.
The Global Manufacturing PMI, produced jointly by Markit and J.P. Morgan, increased to 52.2 from April’s six-month low of 51.9. This was helped dramatically with the full-point rise of the Markit US Manufacturing PMI to a level of 56.4. Markit noted that categories nearly across the board in the US “signaled a robust improvement in overall business conditions.”
Not surprisingly, China continued to show some struggles and continued “marginal deterioration” of conditions in May even though its statistics improved, said HSBC. The HSBC China Manufacturing PMI moved to 49.4 in May from the previous reading (48.1). But the story here is that indicators of ongoing health of the manufacturing sector continue to foreshadow a major decline for Chinese manufacturers.
What was more surprising was the backslide of the previously recovering European Union. The Markit Eurozone Manufacturing PMI slid to 52.2 from April’s 53.4. It represented the worst performance in six month and failed to reach even the flash estimates released between the two set of final statistics. The only major EU economies showing a rise were Spain, which reached a 49-month high, and the Netherlands, whose increase was considerably less noteworthy. Meanwhile, Germany fell to a 7-month low and, troublingly, France fell back into contraction territory.
- Brian Shappell, CBA, CICP, NACM staff writer