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Markit Economics 051013
Markit Economics 051013
Markit Economics 051013
Markit Economics 051013
Markit Economics 051013
Markit Economics 051013
Markit Economics 051013
Markit Economics 051013
Markit Economics 051013
Markit Economics 051013
Markit Economics 051013
Markit Economics 051013
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Markit Economics 051013

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Markit's May economics overview slides (PMI)

Markit's May economics overview slides (PMI)

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  • 1. The Science of FinanceThe Science of FinanceMonthly economic overviewMonthly economic overviewGMay 2013: Global economy sees subdued start to second quarter
  • 2. Monthly economic overviewMonthly economic overviewGlobal economic growth slips to six-month lowHaving held up well in Q1 to signal a rate of global GDP growth that was much improved on the threeHaving held up well in Q1 to signal a rate of global GDP growth that was much improved on the three--year low of 1.4%year low of 1.4%seen in Q4 the global PMI dropped to a sixseen in Q4 the global PMI dropped to a six month low in April to indicate a subdued start to Q2 Worldwide goods exportmonth low in April to indicate a subdued start to Q2 Worldwide goods exportseen in Q4, the global PMI dropped to a sixseen in Q4, the global PMI dropped to a six--month low in April to indicate a subdued start to Q2. Worldwide goods exportmonth low in April to indicate a subdued start to Q2. Worldwide goods exportvolumes have risen over the past two months, but manufacturing growth remains disappointingly weak andvolumes have risen over the past two months, but manufacturing growth remains disappointingly weak and easedeased in April.in April.Meanwhile, subdued demand in many countries caused growth of service sector activity to slow to the weakest for tenMeanwhile, subdued demand in many countries caused growth of service sector activity to slow to the weakest for tenmonthsmonthsmonths.months.Global PMI and economic growthGlobal PMI and economic growth Global tradeGlobal tradeGDP annual % changePMI Global PMI Manu. Exports Index Global Manufacturing Exports y/y%60655.0%7.0%GDP annual % changePMI576220%30%p g p y y50551.0%3.0%42475210%0%10%354045-5 0%-3.0%-1.0%Global PMI Output IndexGlobal GDP32374230%-20%-10%PMI Exports IndexGlobal exports 23500 01 02 03 04 05 06 07 08 09 10 11 12 13-5.0% 3298 00 02 04 06 08 10 12-30%
  • 3. Monthly economic overviewMonthly economic overviewAmong the major developed countries, the US continued toAmong the major developed countries, the US continued toUS leads developed world economic expansion, while the eurozone floundersUS leads developed world economic expansion, while the eurozone flounders65PMI Output Index (manufacturing & services)see the strongest pace of growth, despite the rate havingsee the strongest pace of growth, despite the rate havingslowed sharply compared with the start of the year.slowed sharply compared with the start of the year.556065Growth also eased in Japan, though remains in recoveryGrowth also eased in Japan, though remains in recoverymode compared to the stagnation seen in the fourth quarter.mode compared to the stagnation seen in the fourth quarter.5055p g qp g qGrowth in the UK meanwhile improved to register theGrowth in the UK meanwhile improved to register thet t t i th Ol it t t i th Ol i l t d b t l tl t d b t l t4045UKEurozonestrongest upturn since the Olympicsstrongest upturn since the Olympics--related boost lastrelated boost lastAugust.August.30352008 2009 2010 2011 2012 2013USJapanDeveloped world PMIsDeveloped world PMIsIn contrast, an ongoing deep recession continued to beIn contrast, an ongoing deep recession continued to berecorded in the eurozone.recorded in the eurozone.2008 2009 2010 2011 2012 2013 3
  • 4. Monthly economic overviewMonthly economic overviewMeasured across all emerging markets covered by the PMIs,Measured across all emerging markets covered by the PMIs,Signs of stalling growth evident across the largest emerging marketsSigns of stalling growth evident across the largest emerging markets65PMI Output Index (manufacturing & services)output rose at the slowest rate since September 2011,output rose at the slowest rate since September 2011,registering the secondregistering the second--weakest performance seen in the lastweakest performance seen in the last5560four years.four years.Growth slowed to a sixGrowth slowed to a six--month low in China, while rates ofmonth low in China, while rates of5055expansion were the weakest for a yearexpansion were the weakest for a year--andand--aa--half in Indiahalf in Indiaand Russia. Brazil was the only BRIC economy to registerand Russia. Brazil was the only BRIC economy to register4045ChinaIndiaBrazilfaster growth in April, but even there the pace of expansionfaster growth in April, but even there the pace of expansionremained weak.remained weak.30352008 2009 2010 2011 2012 2013BrazilRussiaEmerging market PMIsEmerging market PMIsWorryingly, stalling or weakened service sector growth pointsWorryingly, stalling or weakened service sector growth pointsto a lack of growth of domestic demand in the world’s biggestto a lack of growth of domestic demand in the world’s biggest2008 2009 2010 2011 2012 2013 4emerging markets.emerging markets.
  • 5. Monthly economic overviewMonthly economic overviewS Korea tops manufacturing rankings, while France displaces Greece at bottomSouth Korea pushed the US into second place at the head of the manufacturing PMIs league table in April. Japan wasSouth Korea pushed the US into second place at the head of the manufacturing PMIs league table in April. Japan wasalso a notable climber up the table up from 12th to 6th place France meanwhile displaced Greece at the foot of the tablealso a notable climber up the table up from 12th to 6th place France meanwhile displaced Greece at the foot of the tablealso a notable climber up the table, up from 12th to 6th place. France meanwhile displaced Greece at the foot of the table,also a notable climber up the table, up from 12th to 6th place. France meanwhile displaced Greece at the foot of the table,and Germany slid further down. In terms of manufacturing exports, the growth rankings were led by the UK for the firstand Germany slid further down. In terms of manufacturing exports, the growth rankings were led by the UK for the firsttime in the global PMI series history, followed by South Korea and Japan.time in the global PMI series history, followed by South Korea and Japan.55MarchAprilManufacturing PMI504540FranSpaGreItalyPolaAusIrelaGerNetDenCzeUKCanSwiChinWOSouRusTaiwBrazVietIndiJapTurkIndoMexUSSK 5nceaineceyandstriaandrmanyherlandsnmarkechRep.nadatzerlandnaORLDuthAfricassiawanziltnamaankeyonesiaxicoKorea
  • 6. Monthly economic overviewMonthly economic overviewNo end in sight to Fed stimulus despite better-than-expected jobs dataUS GDP grew at an annualised rate of 2.5% in Q1, up from 0.4% in Q4, but after allowing for inventories the pace slowedUS GDP grew at an annualised rate of 2.5% in Q1, up from 0.4% in Q4, but after allowing for inventories the pace slowedfrom 1 9% to 1 5% Surveys suggest this slowdown persisted into Q2 with the allfrom 1 9% to 1 5% Surveys suggest this slowdown persisted into Q2 with the all sector PMI (based on both Markit andsector PMI (based on both Markit andfrom 1.9% to 1.5%. Surveys suggest this slowdown persisted into Q2, with the allfrom 1.9% to 1.5%. Surveys suggest this slowdown persisted into Q2, with the all--sector PMI (based on both Markit andsector PMI (based on both Markit andISM data) hitting a tenISM data) hitting a ten--month low in April. Employment growth was meanwhile strongermonth low in April. Employment growth was meanwhile stronger--thanthan--expected, driving the joblessexpected, driving the joblessrate down to its lowest since 2008. However, the rate of job creation is unlikely to encourage the Fed to start withdrawingrate down to its lowest since 2008. However, the rate of job creation is unlikely to encourage the Fed to start withdrawingstimulus any time soon given the weak activity datastimulus any time soon given the weak activity datastimulus any time soon, given the weak activity data.stimulus any time soon, given the weak activity data.USUS PMI and economic growthPMI and economic growth US nonUS non--farm payrolls and unemploymentfarm payrolls and unemploymentComposite PMI GDP q/q% Unemployment rate (%) Monthly change in payrolls (thousands)5762670.51.01.5Composite PMI GDP, q/q%91011200400600Unemployment rate (%) Monthly change in payrolls (thousands)4752571 0-0.50.0789400-20003742-2.0-1.5-1.0GDPPMI56-800-600-400Monthly payrolls changeUnemployment 6322006 2007 2008 2009 2010 2011 2012 2013-2.5 42008 2009 2010 2011 2012 2013-1000
  • 7. Monthly economic overviewMonthly economic overviewJapan’s policymakers rewarded with growth upturn and rising price pressuresJapan’s PMIs showed growth easing from March’s jointJapan’s PMIs showed growth easing from March’s joint--record high, but the pace of expansion remained consistent withrecord high, but the pace of expansion remained consistent withover 1% quarterly growth in GDP Companies reported that improved confidence arising from recent stimulus packagesover 1% quarterly growth in GDP Companies reported that improved confidence arising from recent stimulus packagesover 1% quarterly growth in GDP. Companies reported that improved confidence arising from recent stimulus packagesover 1% quarterly growth in GDP. Companies reported that improved confidence arising from recent stimulus packagesand export gains from the weaker yen have helped revive growth. There were also promising signs in the fight againstand export gains from the weaker yen have helped revive growth. There were also promising signs in the fight againstdeflation. Manufacturers’ input costs rose at the fastest rate for over a yeardeflation. Manufacturers’ input costs rose at the fastest rate for over a year--andand--aa--half, and service sector costs showedhalf, and service sector costs showedone of the strongest increases since 2008one of the strongest increases since 2008one of the strongest increases since 2008.one of the strongest increases since 2008.JapanJapan PMI and economic growthPMI and economic growth Japanese input pricesJapanese input pricesMarkit Japan Composite PMI Japan GDP q/q% PMI Input Costs Index52571.02.03.0Markit Japan Composite PMI Japan GDP, q/q%707580ManufacturingServicesPMI Input Costs Index4247-2.0-1.00.05560653237-5.0-4.0-3.0GDPPMI 404550 7272006 2007 2008 2009 2010 2011 2012 2013-6.0 352008 2009 2010 2011 2012 2013
  • 8. Monthly economic overviewMonthly economic overviewEuro area recession continues, with renewed downturn in GermanyThe Eurozone PMI rose slightly in April, but the surveys continued to indicate a strong pace of economic contraction.The Eurozone PMI rose slightly in April, but the surveys continued to indicate a strong pace of economic contraction.Weakness is spreading across the region with steep downturns in France Italy and Spain now joined by a renewedWeakness is spreading across the region with steep downturns in France Italy and Spain now joined by a renewedWeakness is spreading across the region, with steep downturns in France, Italy and Spain now joined by a renewedWeakness is spreading across the region, with steep downturns in France, Italy and Spain now joined by a reneweddownturn in Germany, where output fell for the first time since last November. The ECB reacted to the ongoing recessiondownturn in Germany, where output fell for the first time since last November. The ECB reacted to the ongoing recessionby trimming its main policy rate to an allby trimming its main policy rate to an all--time low of 0.5%, though few expect the cut to have a material impact.time low of 0.5%, though few expect the cut to have a material impact.EurozoneEurozone PMI and economic growthPMI and economic growth Output by countryOutput by countryMarkit Eurozone Composite PMI Eurozone GDP q/q% PMI Output Index (manufacturing & services)60651.02.0Markit Eurozone Composite PMI Eurozone GDP, q/q%6065PMI Output Index (manufacturing & services)455055-1 00.04550553540-2.0-1.0GDPPMI3540GermanyFranceItalySpain 8302006 2007 2008 2009 2010 2011 2012 2013-3.0 302009 2010 2011 2012 2013p
  • 9. Monthly economic overviewMonthly economic overviewUK economy starts Q2 on good footing, after better-than-expected growth in Q1The April PMIs signalled the fastest rate of expansion in the UK since the OlympicsThe April PMIs signalled the fastest rate of expansion in the UK since the Olympics--related growth spurt seen last August.related growth spurt seen last August.A weaker currency boosted manufacturing exports while construction output stabilised and activity growth picked upA weaker currency boosted manufacturing exports while construction output stabilised and activity growth picked upA weaker currency boosted manufacturing exports, while construction output stabilised and activity growth picked upA weaker currency boosted manufacturing exports, while construction output stabilised and activity growth picked upfurther in services. The improved survey data point to a good start to Q2 and, coming on the back of a betterfurther in services. The improved survey data point to a good start to Q2 and, coming on the back of a better--thanthan--expected 0.3% increase in GDP in Q1 and above target inflation, meant the Bank of England saw no need for moreexpected 0.3% increase in GDP in Q1 and above target inflation, meant the Bank of England saw no need for morestimulus at its May MPC meetingstimulus at its May MPC meetingstimulus at its May MPC meeting.stimulus at its May MPC meeting.UKUK PMI and economic growthPMI and economic growth UK manufacturing exportsUK manufacturing exportsComposite PMI GDP, q/q% UK PMI Manufacturing Exports Index 3m/3m % chg exports (ONS)57620.51.01.5p GDP, q/q%6065812U a u actu g po ts de 3 /3 % c g e po ts (O S)47521 0-0.50.05055043742-2.0-1.5-1.0GDPPMI4045-8-4UK goods exportsPMI New Export Orders 9322006 2007 2008 2009 2010 2011 2012 2013-2.5 352007 2008 2009 2010 2011 2012 2013-12
  • 10. Monthly economic overviewMonthly economic overviewEquities surge to new highs on central bank largesseGlobal equities hit a postGlobal equities hit a post--crisis high again in early May, with the S&P 500 reaching an allcrisis high again in early May, with the S&P 500 reaching an all--time record. Earnings have nottime record. Earnings have notdisappointed but the main thrust comes from central bank stimulus boosting asset prices However with the FTSE All Worlddisappointed but the main thrust comes from central bank stimulus boosting asset prices However with the FTSE All Worlddisappointed, but the main thrust comes from central bank stimulus boosting asset prices. However, with the FTSE All Worlddisappointed, but the main thrust comes from central bank stimulus boosting asset prices. However, with the FTSE All Worldindex some 25% above its average over the past 12 months, equity price momentum and the PMI are moving in oppositeindex some 25% above its average over the past 12 months, equity price momentum and the PMI are moving in oppositedirections suggesting either improved equity sentiment will soon feed through to the real economy, or that stimulus is notdirections suggesting either improved equity sentiment will soon feed through to the real economy, or that stimulus is nothaving the expected impact on growthhaving the expected impact on growthhaving the expected impact on growth.having the expected impact on growth.WorldwideWorldwide equity pricesequity prices % change since:pre-crisispeakend of2012lastmonthFTSE All World Index, divergence from 12 month ave. Global PMIFTSE All World -11.2 10.7 5.5Dow Jones Industrial Ave. 6.6 15.3 3.4S&P 500 4.3 14.5 4.52040606065S o d de , d e ge ce o o t a e G obaFTSE 100 -2.2 11.6 4.9Eurofirst 80 -37.2 5.9 6.9Dax 30 -16 9 5 1 5 640-2005055Dax 30 -16.9 5.1 5.6CAC 40 -35.9 8.7 7.9Shanghai Composite -63.1 -1.0 1.6-80-60-404045Global share price momentumGlobal PMI 10Nikkei 225 -21.8 37.4 8.3-10001 02 03 04 05 06 07 08 09 10 11 12 1335Global PMI
  • 11. minesmines datadatapoolspools intelligenceintelligencepoolspools intelligenceintelligencesurfacessurfaces informationinformationenablesenables transparencytransparencyenablesenables transparencytransparencybuildsbuilds platformsplatformsididprovidesprovides accessaccessscalesscales volumevolumedd kkextendsextends networksnetworks& transforms& transforms businessbusiness..
  • 12. DisclaimerThe information contained in this presentation is confidential. Any unauthorised use, disclosure, reproduction or dissemination, in full or in part, inany media or by any means, without the prior written permission of Markit Group Holdings Limited or any of its affiliates ("Markit") is strictlyprohibited.Opinions statements estimates and projections in this presentation (including other media) are solely those of the individual author(s) at the timeOpinions, statements, estimates and projections in this presentation (including other media) are solely those of the individual author(s) at the timeof writing and do not necessarily reflect the opinions of Markit. Neither Markit nor the author(s) has any obligation to update this presentation in theevent that any content, opinion, statement, estimate or projection (collectively, "information") changes or subsequently becomes inaccurate.Markit makes no warranty, expressed or implied, as to the accuracy, completeness or timeliness of any information in this presentation, and shallnot in any way be liable to any recipient for any inaccuracies or omissions Without limiting the foregoing Markit shall have no liability whatsoevernot in any way be liable to any recipient for any inaccuracies or omissions. Without limiting the foregoing, Markit shall have no liability whatsoeverto any recipient, whether in contract, in tort (including negligence), under warranty, under statute or otherwise, in respect of any loss or damagesuffered by any recipient as a result of or in connection with any information provided, or any course of action determined, by it or any third party,whether or not based on any information provided.The inclusion of a link to an external website by Markit should not be understood to be an endorsement of that website or the sites owners (or theirThe inclusion of a link to an external website by Markit should not be understood to be an endorsement of that website or the site s owners (or theirproducts/services). Markit is not responsible for either the content or output of external websites.Copyright ©2013, Markit Group Limited. All rights reserved and all intellectual property rights are retained by Markit.

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