US manufacturing downturn continues
Newsflash: America’s factory output contracted last month, according to the closely-watched ISM survey.
The ISM’s US manufacturing PMI fell to 48.1 from 48.3, showing a sharper fall in output, back towards the 10-year low seen in September.
Eurozone factories shrink again
Just in: Eurozone factories shrank again in November, for the 10th month in a row.
The IHS Markit Eurozone Manufacturing PMI has risen to 46.9 in November, a little better than expected, from October’s 45.9. That’s below the 50-point mark showing stagnation, continuing a contraction that began back in February.
Factory bosses reported that output, and new orders, both continued to fall last month — although at a slower rate than in October.
Only Greece and France posted a rise in manufacturing activity, Markit says:
Germany remained bottom of the table, despite recording its best PMI reading in five months.
Austria and Spain were the next worst performing, but similarly recorded weaker rates of contraction, whilst Italy registered its lowest PMI print for eight months.
This means Europe’s manufacturing sector remains in recession, says Chris Williamson, chief business economist at IHS Markit:
“A further steep drop in manufacturing output in November means the goods-producing sector is likely to have acted as a major drag on the eurozone economy again in the closing quarter of 2019.
The survey data for the fourth quarter so far are indicating a quarterly rate of contraction in excess of 1% for manufacturing.
But… the rise in the PMI is still a positive sign, Williamson adds.
“Although still signalling a steep rate of decline, the manufacturing PMI nonetheless brings some encouraging signals which will fuel speculation that the worst is over for euro area producers, barring any new set-backs (notably in relation to Brexit and trade wars).
In particular, November saw the rate of loss of export sales easing further from July’s recent record, helping pull other indicators such as output, employment, order books and purchasing off their recent lows.
On Thursday, China’s official manufacturing PMI, released by the National Bureau of Statistics (NBS), stood at 49.3 in October, down from 49.8 in September and below the expectation in a Bloomberg survey of analysts for an unchanged reading. The October figure was the lowest since hitting 49.2 in February.
The Caixin PMI mainly tracks 500 smaller private factories, while the official index focuses on 3,000 larger manufacturers.
The gauge for new export orders returned to expansionary territory and reached the highest point since February 2018, due likely to the US’ move to exempt more than 400 types of Chinese products from additional tariffs
The Caixin statement showed new export orders rose at the fastest pace since US-China trade war broke out nearly 16 months ago, pointing to continued improvement in the manufacturing industry