Global Economic Analysis and News of Note
- The JP Morgan global purchasing managers index (PMI) increased to 52.0 in February from 51.7 in January. Output, output prices and input prices all improved while employment and new orders remained steady. It was the 27th month in a row the reading showed expansion in the global manufacturing sector.
- The Markit Eurozone PMI remained unchanged (at 51.0) from January to February as new orders and employment improved. Markit Chief Economist Chris Williamson said, “The eurozone manufacturing sector barely expanded in February, highlighting the malaise that still hangs over the region’s goods-producing economy as a whole. However, beneath the disappointing headline figure, different parts of the manufacturing economy are clearly moving at very different speeds, ranging from a Celtic boom to a Gallic slump.” Indeed, Austria, Germany and France’s individuals PMIs all remained below the all-important 50 level while Ireland’s reading improved to a more than 15-year high.
- Readings for the manufacturing sectors in various Asian nations were mixed last month. The HSBC PMI for China increased to 50.7 in February from 49.7 in January. Output and new orders improved in China last month, but employment in the manufacturing sector declined. Meanwhile, the Markit PMI for Japan fell to 51.6 in February from 52.2 in January even though new orders and production increased. Vietnam and Taiwan’s PMIs increased slightly, India’s fell slightly and South Korea’s PMI remained unchanged for the month. As reminder, summaries for all PMI readings can be found here.
- The Chinese government last week reduced its economic growth target for this year, reducing it from 7.5 percent to seven percent. According to Reuters, Premier Li Keqiang said, “The downward pressure on China's economy is intensifying.”
- Manufacturing orders in Germany fell 3.9 percent in January, nearly four times the one percent decline analysts had expected.