In line with a series of positive economic news from Germany last week, the manufacturing Purchasing Managers’ Index (PMI) came in at 48.4 in December, up from 47.9 in November. Although a figure below 50 for this index signifies contraction, the markets still welcomed the better-than expected statistic.
This news came hot on the heels of data released the previous week showing that Germany’s inflation rate eased to 2.4% in December.
Unemployment also fell more than forecast in December, boosted by strong exports of cars and machinery. The adjusted jobless rate dropped to 6.8%.
Meanwhile, the UK Cips/Markit report on services for December showed an improvement in line with its sister report on manufacturing. The headline business activity index of the services survey rose from 52.1 to 54, which is consistent with modest growth in output in the services sector.
This follows improvements in both the manufacturing and construction PMIs earlier in the week.
While the surveys are showing positive signals, at least as at the end of last year, given the government’s austerity measures and the impact of the eurozone crisis, it remains to be seen how long this will last.
Finally, the US non-manufacturing PMI rose by 0.6 points to 52.6 in December from November’s 52. This increase was less than expected as analysts had predicted the index would rise by one point to 53 in December.
Moreover, this rebound, which only partially reversed the decline in November, was seen as a modest one and leaves the index still at a relatively depressed level, consistent with GDP growth of little more than 1% annualised.
Analysing the underlying numbers, both the new orders and employment sub-indices strengthened, but only marginally, and in any case they remain at quite depressed levels.
This article was compiled by Bank of Valletta plc for general information purposes only.