European Industrial Production, April 2024: Eurostat has also published its sectoral output data although they use Industrial Production (IP) as the top-level aggregate; while the largest part of this is the manufacturing sector, it also includes energy and utilities (but not construction) and the breakdown of the total by sector misses out having a figure for manufacturing.
There were some mixed messages in the latest monthly data with total IP (seasonally and calendar adjusted) for the EU growing by +0.5% while the Euro-zone registered a decline of -0.1%. This may partly reflect a reversal of the March figures where output in the EU was stable but grew by +0.5% in the Euro-zone. Compared to a year ago (April 2023), total IP in the EU fell by -2.0% with a reduction of -3.0% for the Euro-zone.
Calculating the 3-month rolling trends from the monthly indices published by Eurostat shows that total IP in the EU over the latest 3 months (February, March & April 2024) was -0.5% lower than in the previous period (November & December 2023 and January 2024) and fell by -0.6% for the sub-set of Euro-zone countries.
Within the total, the sub-set of the capital goods industries (the most important for our members) saw output grow compared to March 2024 by +0.5% for the EU and +0.7% for the Euro-zone. However, looking back to April 2024 gives trends of -4.9% and -5.3% respectively. In all of these comparisons, this put the capital goods industries in the middle of the 5 sub-sectors for which Eurostat publishes the breakdown.
Focusing only on the 12-month trends (the comparison with March 2024), of the 27 Member States, total IP increased in 13 and declined in 14. The largest reductions in total IP compared to April 2023 were in Ireland (-15.7% – this is often volatile because of the impact of the headquarters of multi-national companies rather than a genuine trend in activity), Latvia (-7.8%) and Finland (-6.8%); the largest increases were in Denmark (+17.4%), Greece (+10.8%) and Slovenia (+7.4%)
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 (13 June) or requested from MTA.
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European GDP, 1st Quarter 2024: In the latest update from Eurostat, the GDP trends for the EU and the Euro-zone were unchanged from the previous estimate of quarter-on-quarter growth of +0.3% for both areas. However, thanks to revisions to earlier data, there was a small change in the annualized rate for the EU which is now put at +0.5% (previously +0.4%); the estimate of +0.4% for the Euro-zone has not been revised.
With data now available for all 27 EU Member States, only Denmark, Estonia and the Netherlands saw their economies contract at the start of 2024, although Slovenia saw no change compared to Q4-23. Of the three countries with a negative figure, only Estonia is in recession (at least two consecutive quarters of non-positive growth) with the other two having seen growth in the previous quarter.
We can also look at the annualized rate of growth and this gives a slightly different picture; there were 7 EU Member States – Austria, Estonia, Finland, Germany, Ireland (although this is largely the result of distortions from the HQ operations of multi-national companies), Luxembourg and the Netherlands.
You can get the full details from the Eurostat website at https://ec.europa.eu/eurostat/news/euro-indicators (07 June) or requested from MTA.
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USMTO and CTMR, April 2024: The US Manufacturing Technology Orders (USMTO) programme tracks orders in the US market, based on the reports from participants. In the first 4 months of 2024, machine tool orders are -16.2% lower than in the same period of 2023 (January to April inclusive).
It is worth noting that while this does not look great and 2024 has had the weakest start to the year since 2020, orders in the first 4 months of the year are still nearly 5% above the average order volume for this period of a year since USMTO began tracking orders in 1998. So, while it is down and looks quite dramatic on a short-run chart, business is still at a reasonable level.
The AMT press release on these results notes while orders from contract machine shops are down in line with the general trend and the automotive industry seems to be at the end of an investment cycle, demand from the aerospace industry remains strong, driving orders in the South-East region (particularly in North Carolina).
This shows in the regional breakdown where this is one of two areas where orders are higher than in the first 4 months of 2023; the South-East is up by +16% and the West (which also has a significant footprint of the aerospace industry) has grown by +8%. The other 4 regions have all seen significant declines on this comparison ranging from -29% in the North-Central-East area (this is the largest by value), though -24% in the North-East to declines of -22% in both the South-Central and North-Central-West areas.
The US Cutting Tool Market Report (CTMR) tracks the tooling business on a similar basis; for this part of the market, business was +4.6% higher than in the same period in 2023. In contrast to the machinery report, the press release for this series suggests that “there have been some downgrades in expected needs from the aerospace sector”; this probably relates to the restrictions on output of civil aircraft at Boeing which, while temporary, is likely to last for most of this year. This report also notes that volumes are broadly flat compared to last year, suggesting that the growth reported above is largely due to price increases. You can download the press releases for the two surveys from the AMT web-site at www.amtonline.org/topic/intelligence, with the CTMR release also published on the USCTI web-site at www.uscti.com; alternatively, you can request either or both releases from MTA and we can make sure you get them when they are published each month.