Flash PMIs reveal insight into global growth soft-patch | AccountingWEB

Flash PMIs reveal insight into global growth soft-patch

Markit has published a guide to economic data releases for the week commencing 22 August 2011, noting that flash PMIs will provide the first insights into business conditions in August along with the second estimates of Q2 economic growth for the UK and US.

Here are the Markit comments:

"With economic data releases that are usually confined to the sidelines now having the potential to create havoc in financial markets, the news flow will be watched closely for any clues that the global economy's soft patch is coming to an end, or whether it is turning into something more worrying.

"The flash PMIs, published on Tuesday, will provide the first available indications of business conditions in China and the Eurozone during August. The Markit Eurozone Composite PMI™ sank to a 22-month low in July, signalling a near-stagnation of the region's recovery as malaise spread from the periphery to the core. French and German flash PMIs fell sharply last month. The data suggest that Eurozone GDP growth may slow in Q3 from the already disappointing 0.2% seen in Q2. The IFO and GfK consumer confidence surveys will provide further insight into the health of the German economy later in the week.

"In China, the HSBC Manufacturing PMI™ slipped into contraction territory for the first time in a year during July, fuelling concern that growth in the world's second-largest economy is slowing sharply as policymakers seek to combat inflation, suggesting no let-up in the global soft-patch at the start of the third quarter.

"The US sees the release of durable goods orders and new home sales for July, plus the second estimate of Q2 GDP, which a Reuters poll shows analysts are expecting to be revised from an annualised rate of 1.3% to 1.2%.

"The revised estimate of UK Q2 GDP is also released, which we expect to remain unchanged at 0.2%, although there is a risk that the figure could be even lower as industrial production for June came in weaker than the ONS had assumed in their first estimate. The health of the UK household sector in August will also be revealed through Markit's Household Finance Index, which tracks 1500 households. The July HFI showed finances deteriorating at the fastest rate since early-2009, at the height of the recession. The CBI survey will show

manufacturing conditions in August, but lags the PMI™ - which suggests some downshift in the CBI measure is to be expected."

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nigel | | Permalink

For those like me who didn't understand a word of this (but didn't like to admit it!), a PMI appears to be a "Performance Management Index", and the published indices recently show that things have got worse! But you probably knew that already.

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