Purchasing Managers Index, August 2023 (update): As promised, this note is to update the manufacturing Purchasing Managers’ Index (PMI) data that was released last Friday. The overall global index improved slightly but at 49.0 it extends the run of negative values (below the crucial 50 level that marks the boundary between expansion and contraction) to 12 months. This came as the pace of decline in both output and orders slowed and there was even a marginal increase in employment. A slight note of concern comes from the fact that the investment goods PMI was the weakest of the 3 sub-sectors in August, the first time this has happened since the post-pandemic recovery.
In the Americas, most of the countries saw a weakening of an already negative PMI reading compared to July with only Brazil seeing an increase which, significantly, moved their index just above 50; the other exception was Mexico which, despite seeing the largest reduction in the region, still had a reading in positive territory at 51.2.
The other missing data from last week was for the ASEAN region which saw a marginal increase in its already positive PMI reading.
Therefore August saw only 7 of the countries/regions that we cover in positive territory – in descending order, these were India, Greece, Mexico, China, the ASEAN region, Ireland and Brazil. All the other countries were below the crucial 50 level, with Germany and Switzerland the weakest with readings below 40.
The updated set of charts can be downloaded below with the individual S&P Global PMI reports on their website at https://www.pmi.spglobal.com/Public/Release/PressReleases. You should note that the PMI readings for Hungary, Sweden and Switzerland are not compiled by S&P Global but can be found with an appropriate internet search (it also means that they are not part of the global PMI calculation).
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European GDP, 2nd Quarter 2023: In its latest estimate, Eurostat has revised down the rate of growth for GDP in the Euro-zone to just +0.1% (the previous estimate was +0.3%; there was no change to the estimate for the EU which is flat.
However, this is not quite as bad news as it might first appear because it comes mainly because of an upward revision to data for the 1st quarter of the year (and earlier quarters). Most notably, the recession that was previously reported in Germany with negative GDP growth in both Q4-22 and Q1-23 is gone with growth of +0.2% in both of these quarters now being recorded. There have also been significant revisions to the data for Ireland – a volatile economy that is often revised because of the size of the headquarters operations of a number of large multi-national companies – and, to a lesser extent, Italy and the Netherlands.
The upshot of these revisions and the latest data is that there were 6 EU countries who saw their economy contract in the 2nd quarter of 2023 but only Romania is in a recession as the others all grew in Q1. Lithuania had a recession in the two quarters over the turn of the year (Q4-22 and Q1-23) but this was ended by growth in the latest period; similarly, Czechia and Portugal were in recession over the 2nd half of 2022 but have seen growth in their economy in both of the first two quarters of 2023.
You can get the full details from the Eurostat News Release which can be downloaded from their website at https://ec.europa.eu/eurostat/news/euro-indicators (7 September) or requested from MTA.