Round up of EU PMI's before the North American open
(Kitco News) - Manufacturing data from Europe has still been impressive but marginally missed estimates (flash readings).
The main manufacturing nation in the Euro Area is Germany and they recorded a respectable reading of manufacturing PMI (Apr) 66.2 vs flash reading of 66.4 and previous 66.4. This is just slightly shy of the previous month's reading and new orders reportedly eased but remained close to the record highs seen in March.
The IHS Markit reported noted that severe supply-side disruption remained a hindrance to the sector's performance, however, weighing on output and contributing to rises in both input cost and output price inflation, the latter to a new record high.
Phil Smith, Associate Economics Director at IHS Markit, said "The PMI continues to send positive signals for the health of the German manufacturing sector, with the headline index holding
close to March's record high thanks in large part to sustained strong growth in new orders.". One of Smith's key comments noted, "The data show that goods producers have redoubled
efforts to expand capacity, with April seeing a notable acceleration in the rate of job creation to the fastest in more than two-and-a-half years,". This could cause a problem to growth as many supply chains will not be able to keep up with demands.
For the Euro Area as a whole, the reading hit a fresh survey record high in April (62.9). There were considerable increases in output and new orders signalled again and supplier delivery times lengthened at an unsurpassed rate helping to drive rapid price increases. The report said growth was again broad-based per market group, with both the investment and intermediate goods categories registering considerable gains. The Netherlands led the way in terms of absolute PMI readings, posting a new record for that survey.
When speaking about the Euro Area report, Chris Williamson, Chief Business Economist at IHS Markit said “The big uncertainty is how long these upward price pressures will persist for, and the extent to which these higher charges for goods and services will feed-through to consumers.". He then added “Encouragement comes from the sharp increase in employment and investment in machinery and equipment signaled by the survey, which suggests firms are scaling up capacity to meet resurgent demand. This should help bring supply and demand more into line, taking some pressure off prices. But this will inevitably take time.”.