| Euro area December final PMIs: Small improvements confirmed across the board |
| 02.01.12 19:04 | |
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Euro area: Our -0.3% q/q baseline scenario for Q4 still validated by our PMI-based GDP indicator The euro area "flash" headline manufacturing index was confirmed at 46.9 in its final form. Between November and December, the PMI manufacturing index thus increased 0.6 points. The output and new orders indices eventually rose by 1.4 and 1.1 points to 47.1 and 43.5. For the second consecutive month since April 2010, the employment index was below the 50-breakeven at 49.9, consistent with job losses in the sector - although at a very minor pace at this stage. As in the "flash" estimate, the final estimate of input and output prices rose for the second consecutive month since March/April 2011. The prices balances registered only small shifts, with the manufacturing input prices index revised to 49.3 (from a preliminary estimate at 48.9) in December, up from 48.9 in November and the output prices index rising to 50.8 (from a preliminary estimate at 51.1), up from 50.6 in November. Let's note also that this index did not go below 50 in the current cycle, and hence avoided any indication of deflationary pressures. At the country level, Spain's index remained broadly flat at 43.7, while Italy's edged up to 44.3. But in both countries, the index levels remain fairly low. Germany's print was revised up slightly to 48.4, from 48.1 in the flash estimate, and up from 47.9 in November. France's was revised up to 48.9, from 47.3 the previous month. While the December PMI readings improved slightly in relation to October and November, they still seem to indicate, at levels below 50, that the euro area is currently going through a mild recession (we project that real GDP will contract by 0.2% q/q in Q1 after a fall of 0.3% in Q4). source: BarCap |
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