January manufacturing data has been pouring in over the last 12 hours providing yet more data points for those trying to figure out the health of the global economy. Expectations, especially for Europe, were not high.
Manufacturing in the Eurozone contracted for the sixth straight month, coming in at 48.8, but was up from December’s reading of 46.9. Any reading under 50 designates contraction. France and Italy both declined for the sixth straight month as well. France came in at 48.5, Italy at 46.8 and Spain lagged at 45.1.
The UK was a pleasant surprise, jumping to 52.1, well above expectations of just 50. That was the UK’s highest reading since May 2011.
Germany also defied predictions, showing expansion as PMI rose to 51, up from 48.4 in December.
In the United States, the ISM Manufacturing Index showed increased manufacturing activity for the third straight month. The index rose to 54.1 in its strongest month since June 2011. New orders climbed 2.8% to 57.6. The backlog also rose.
Two Sets of Data Out of China
The wildcard is China, where “official” PMI showed expansion but the unofficial HSBC survey continued to show contraction. Which one to believe?
The “official” Chinese PMI came in at 50.5 up from 50.3 in December and the second straight month of expansion. However, the all important export sector remained depressed. It fell 1.7% to 46.9.
The “unofficial” HSBC survey was under 50 for the third straight month at 48.8. It surveys more companies, most of which are smaller and, right now, are having a more difficult time obtaining credit than the “official” survey, which tracks larger, state-run enterprises. Both of these numbers, however, are still the weakest PMI data in 3 years.
Can anyone draw any conclusions about the health of the global economy from this data?
Or is it still too mixed to shed any new light?
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