Friday, June 01, 2012
Weak data everywhere
Posted by David Smith at 02:15 PM
Category: Thoughts and responses

The May manufacturing purchasing managers' index was a shocker, for which there was no obvious warning in other surveys of the sector. This is the summary by Markit, which produces the figures:

"The UK manufacturing sector took a sudden sharp turn for the worse in May. Companies scaled back production and employment as inflows of new business declined at the steepest pace since March 2009, amid rising uncertainty among domestic and overseas clients.

"At 45.9 in May, down from 50.2 in April, the seasonally adjusted Markit/CIPS UK Manufacturing Purchasing Managers’ Index® (PMI®) fell to its lowest level for three years and below the neutral 50.0 mark for the first time since last November. The headline index fell by 4.3 points over the month, the second-steepest fall in its 20-year history."

It was accompanied by a weak eurozone PMI, which dropped to 45.1 in May from an already weak 45.9 in April. The US manufacturing PMI was stronger, dropping from 56 to 54, but was nevertheless at a three-month low.

Much more disappointing were the US employment numbers, which rose only 69,000 in May after a downward-revised 77,000 in April. This compared with an average of 226,000 in the first quarter. The unemployment rate edged up from 8.1% to 8.2% (the same as the UK rate). More details here The eurozone crisis, it seems, has a lot to answer for.