PMI ups and downs: China and Russia on rise, Europe in doldrums

Russia’s manufacturing showed a surprising growth in April signaling the best overall performance of the sector since March 2011, according to the report prepared by HSBC. 

­The country’s Purchasing Managers Index (PMI) grew to 52.9 in April from 50.8 in March, HSBC reported.  New orders rose at a solid pace in April as companies reported a recovery in market conditions.  New exports grew for the second month breaking the downward trend of previous months. 

On average Russian manufacturers expanded their workforce in April after a reduction in March.  Moreover, the rate of job creation was the strongest since March 2011, the study reveals. 

“Taking into account stronger HSBC data, the official data are likely to show growth after a March slowdown,” said Alexander Morozov, chief economist at HSBC Russia. 

“Despite that we remain cautious.  Risks of a slowdown in the manufacturing sector remain high amid an uncertain global background”. 

Meanwhile China’s manufacturing activity performed better than expected as HSBC reported its PMI grew to 49.3, up from 48.3 in March.  Growing investors’ confidence pushed up Asian indices at the early trade. 

However, the PMI of euro-zone’s nations proved weaker; preliminary results signaling further contraction.  Spain's PMI fell to 43.5, down from 44.5 in March as new orders fell and unemployment surged.  Italian PMI plunged to 43.8 from 47.9 in March.  The Greek PMI declined to 40.7 from 41.3, after some improvement in March. 

The PMI data from the two strongest economies in the euro zone were another disappointment as Germany’s PMI dropped to 46.2, a 33-month low, from 48.4 in a previous month.  France PMI grew to 46.9 comparing to 46.7 in March, but was below expected 47.3.  New orders in French manufacturing have fallen at the fastest rate in three years, while employment declined at fastest pace since July 2010. 

The UK PMI dropped to 55.8, down from 56.7 in the previous month, but is still above the 50.0 no-change mark.