CECIMO Statistical Toolbox

Transcription

1 European Association of the Machine Tool Industries Where manufacturing begins In this edition: 0 Introduction 1 Machine tool orders 1.1 CECIMO orders 1.2 Peter Meier s forecast CECIMO Statistical Toolbox April 2014 Edition 2 Macro-economic indicators in the EU & correlation with MT orders 2.1 GDP 2.2 Interest rates - Euribor 2.3 Industrial production index 2.4 Gross Fixed Capital Formation (GFCF) 2.5 Capacity utilisation in the invest. goods sector 2.6 Bank lending survey 2.7 Foreign exchange rates 2.8 Industrial employment 3 Business expectations 3.1 OECD Business Confidence Indicator for Europe 3.2 Purchasing Managers Index (PMI) CECIMO aisbl 66, avenue Louise 1050 Brussels Belgium Tel: Fax: For more information: information@cecimo.eu 4 MT-IX 5 CECIMO trade 5.1 CECIMO trade 5.2 CECIMO Business Climate Barometer 6 European Commission economic forecast NB: only the highlighted indicators are available in this edition of the toolbox

2 Introduction (Glossary at the end of the document) The euro area has finally emerged from recession. Activity shrank by about 0.5% in 2013, but growth has been positive since the second quarter of 2013 after a long period of output decline. The turnaround is attributable, in part, to lighter fiscal drag and some impetus from private domestic demand for the first time since The breakdown of the purchasing managers indices showed that the euro area s manufacturers are leading the way, which increases even more the outlook for European machine tool builders. The figures of Markit indicate that factories producing basic metals and fabricated products are the best performing of 11 industry segments. Manufacturing all together makes up just over half of all economic activity in the region. The average PMI for euro area metal manufacturers, a big client sector of the machine tool industry, has been an impressive 58.3 during the three months to February, well above the crucial 50 level that marks an expansion in activity. Nevertheless, the concerns about the strength and durability of the recovery remain. Europe still struggles with legacies of the crisis like high unemployment, weak private and public balance sheets, contracting credit and a large debt burden. Accommodative monetary policy, completion of financial sector reforms, and structural reforms are critical for medium-term prospects. One risk for European machine tool industry is related to the trade flows towards Russia, Ukraine and other CIS countries. Ukrainian instability brought down European machine tool exports about 37% in the last quarter of The Crimean crisis can influence the exports to the entire region, including Russia which is still the third most important export market for CECIMO countries. To minimise risks to the economic recovery, it is very important to create the right conditions for economic stabilisation in Ukraine, which will also help stabilise the political situation in the country. The European Commission, the United States and international organisations have been working intensively to prepare swiftly a package of macro-financial assistance for Ukraine. It is in the essential interest of Ukraine and Europe to maintain peace and stability in the region. This financial aid will help stabilise the worsening financial situation in the country and will therefore be one vital part of achieving a political solution to the crisis. The difference of growth performance of Ukraine and Poland over the past two decades clearly demonstrates the role that Europe can play in supporting the development of Ukraine. While the two countries started at quite similar income levels in the early 1990s, Poland s per capita national income at purchasing power parity is today about two and a half times that of Ukraine. Many factors have affected these divergent growth paths but it is clear that Poland s steady course of institutional reform, to unleash a growth potential and to ensure a rule of law, as well as the political and economic integration with the EU have been key drivers of investment and growth. 2.2 Interest rates EURIBOR In March, the 3-month Euribor monthly average and 12-month Euribor monthly average increased by 2 and 3 basis points respectively compared to the levels observed in February. The average 3-month Euribor recorded 0.31% and 12-month Euribor 0.58%. In its latest policy meeting, the ECB kept the key interest rates unchanged. However, the pressure on the ECB is increasing. The annual headline inflation rate in the euro area continues declining and was confirmed at 0.5 per cent in March compared with 0.7 per cent in February. This further drop will stoke fresh fears that the euro area is drifting towards a Japanese-style deflation. Mario Draghi, the ECB s president, signalled during his last public speech that further monetary stimulus was needed. See glossary for definitions 2

3 2.3 Industrial production index Introduction In February 2014 compared with January, seasonally adjusted industrial production rose by 0.2% in the euro area (EA18) and by 0.4% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In January, industrial production remained stable in the euro area and increased by 0.2% in the EU28. The increase of 0.2% in industrial production in the euro area in February 2014, compared with January 2014, is due to the production of intermediate goods rising by 0.6%, while the production of capital goods remained stable and the production of durable consumer goods fell by 1.2% and energy by 1.7%. In the EU28, the increase of 0.4% is due to the production of intermediate goods rising by 0.5% and the production of capital goods by 0.2%, while the production of durable consumer goods fell by 0.7% and energy by 1.4%. The highest increases in industrial production were registered in Malta (+5.4%), Ireland (+5.0%) and Lithuania (+2.5%), and the largest decreases in Croatia (-2.8%), Estonia (-2.2%) and Romania (-1.3%). In February 2014 compared with February 2013, industrial production grew by 1.7% in the euro area and by 2.1% in the EU28. The increase in industrial production in the euro area is due to the production of intermediate goods rising by 4.2% and the production of capital goods by 4.0%, while the production of durable consumer goods fell by 0.6% and the production of energy by 8.5%. In the EU28, the increase of 2.1% is due to the production of intermediate goods rising by 4.6%, the production of capital goods by 4.5% and the production of durable consumer goods by 1.5%, while production of energy fell by 7.2%. The highest increases in industrial production were registered in Slovakia (+9.0%), Romania (+8.9%) and Hungary (+8.2%), and the largest decreases in the Netherlands (-8.9%), Finland (-5.4%) and Lithuania (-2.1%). See glossary for definitions 2.4 GFCF Gross fixed capital formation (GFCF) rose by 0.5% in the euro area (EA17) and by 0.7% in the EU28 during the third quarter of 2013 compared with the previous quarter, according to flash estimates published by Eurostat. In the second quarter of 2013, GFCF grew by 0.5% and 0.7% respectively. Compared with the same quarter of the previous year, seasonally adjusted GFCF fell by 1.9% in the euro area and by 1.0% in the EU28 in the third quarter of 2013, after -2.5% and -1.6% respectively in the previous quarter. During the fourth quarter of 2013, GFCF in the United States grew by 0.3% compared with the previous quarter (after +1.4% in the third quarter of 2013). Compared with the same quarter of the previous year, GFCF rose by 2.3% (after +4.0% in the previous quarter). 2.7 Foreign exchange rates The euro appreciated against the Japanese yen by 1.5% and against the US dollar by 1.3% in March. Over the same period, the euro depreciated against the Swiss franc by 0.4%. On 2 April 2014, the nominal effective exchange rate of the euro, as measured against the currencies of 20 of the euro area s most important trading partners, stood 0.4% above its level at the beginning of March and 5.3% above the level one year earlier. Movements in exchange rates during the period were largely related to developments in expectations about future monetary policy, as well as to adjustments in market expectations regarding the economic outlook for the euro area relative to other major economies. 2.8 Industrial employment The number of persons employed increased by 0.1% in both the euro area (EA17) and the EU28 in the fourth quarter of 2013 compared with the previous quarter, according to Eurostat. In the third quarter of 2013, employment remained stable in 3

4 Introduction the euro area and increased by 0.1% in the EU28. These figures are seasonally adjusted. In the fourth quarter of 2013, compared with the same quarter of the previous year, employment fell by 0.5% in the euro area and by 0.1% in the EU28 (after -0.8% and -0.3% respectively in the third quarter of 2013). Over the whole year 2013, employment decreased by 0.9% in the euro area and by 0.4% in the EU28, compared with -0.7% and -0.2% respectively in Eurostat estimates that, in the fourth quarter of 2013, million men and women were employed in the EU28, of which million were in the euro area. These quarterly data on employment provide a picture of labour input consistent with the output and income measure of national accounts. Among Member States for which data are available, Lithuania (+1.0%), Ireland and Portugal (both +0.7%) recorded the highest increases in the fourth quarter of 2013 compared with the previous quarter, and Estonia (-1.3%), Latvia (-1.1%) and Cyprus (-0.6%) the largest decreases. 3.1 OECD Business Confidence Indicator (BCI) for Europe Business confidence indicators (BCIs), designed to anticipate turning points in economic activity relative to trend, point to weakening growth in major emerging economies, with the exception of China, where the BCI points to growth remaining around trend. BCIs point to growth below trend in Brazil and India, and to growth losing momentum in Russia. For the United States, the BCI points to growth remaining around trend. The BCI points to growth returning to trend in Japan. In Europe as a whole, the BCI points to growth above trend. In Germany and Italy, the BCIs continue to indicate a positive change in momentum and for France, the BCI points to stable growth momentum. The BCI is tentatively losing momentum while remaining above trend in the United Kingdom. See glossary for definitions Purchasing Managers Index (PMI) Global manufacturing growth lost some momentum in March. The PMI recorded 52.4 in March, slightly down from February s 53.2 but holding above the 50 mark that divides growth from contraction. Global production has increased for the last seventeen months in a row. However, Asia shows slowdown in manufacturing. The weak performance of China s massive manufacturing sector remains a primary concern for the global economy. The final PMI of factory activity fell to an eightmonth low of 48.0 in March, and has remained below the 50 level since January. Manufacturing activity in the United States remained steady. The American PMI reached to 53.7 in March, figure solidly above 50, indicating ongoing growth. In March, the Euro area manufacturing activity stayed close to the highest level in almost three years. The PMI slipped to 53.0 from 53.2 February. Manufacturing growth in Germany, Europe s largest economy, slowed to 53.7 in March from In France, manufacturing returned to growth for the first time in two years. The factory gauge increased to 52.1 from 49.7 in February. In Italy, the index rose to 52.4 from 52.3, while it advanced to 52.8 from 52.5 in Spain. Despite having cooled slightly in March, the euro area manufacturing sector continues to enjoy its best spell of growth since early The rate of output growth remains encouragingly robust, with the survey indicating that production rose by around 1.0% in the first quarter. That means the goods-producing sector is on course to provide a meaningful boost to the overall economy in the first three months of the year. The surveys are signalling a GDP increase of approximately 0.5%. While the survey paints a picture of a manufacturing recovery that is broadbased, with output rising in all countries surveyed for the second month running, the slight easing in the rate of new order inflows raises the risk of production growth weakening further in April, commented Markit. See glossary for definitions 4 MT-IX The MT-IX recorded a decrease of 8.8% in March, reflecting a slowdown of manufacturing activity in Asia and to lesser extent in Europe. The index lost 18 points compared to February s value, and posted at 187 points in March

5 6 Introduction Machine tool companies booked decreases in their market capitalisation in Japan, Taiwan and Brazil. The market value of machine tool companies increased in the United States and South-Korea. European companies recorded more varied results, the market capitalisation increased in five companies out of 11. See glossary for definitions 5.1 CECIMO trade In the last quarter of 2013 CECIMO exports contracted 8%, reaching to 4.7 billion. Shipments to Asia declined of 23% and to the biggest Asian market, China, of 29%. Improving economic climate and the rise of European manufacturing support exports to the region. European machine tool builders exported to other CECIMO countries machines in value of 1.8 billion which means an increase of 8% compared to the same period a year ago. Growth is expected to accelerate for most advanced economies outside the EU. In the US, where the headwinds from fiscal policy have been waning, private consumption is gaining speed thanks to robust job creation and rising house prices. Among emerging market economies, the picture is uneven. There are continued signs of weakness in Russia and Brazil, some stabilisation at more sustainable growth rates in China and an improved outlook for India. The rebalancing of Europe s growth engines is confirmed: domestic demand overtakes exports as main thruster. Investment growth, in particular investment in equipment, is projected to significantly strengthen, as the main impediments to firms demand and profits (uncertainty, financing conditions, deleveraging needs) are slowly receding, and the improvement in the economic outlook is confirmed. Finally, the first signs of increasing European machine tool demand are shown by the growing imports and domestic orders intake. See glossary for definitions * * * * * At the same time CECIMO imports confirm the better outlook for European industry. CECIMO machine tool imports increased 1% in the fourth quarter of The imports decreased 6% in the third quarter of Imports increased in the three biggest regions Asia, America and Europe. Japan remains the biggest supplier to CECIMO: in the last quarter of 2013, imports reached to million, increasing of 7%. 6 European Commission Forecast The European Commission s winter forecast indicates a continuation of the economic recovery in most Member States and in the EU as a whole. After exiting recession in spring 2013 and three consecutive quarters of subdued recovery, a moderate step-up in economic growth is foreseen. The forecasts for GDP growth this year and the next have been raised slightly, and this is reflected in the recent positive economic news. Following a real GDP growth of 1.5% in the EU and 1.2% in the euro area in 2014, activity is seen accelerating in 2015 to 2.0% in the EU and 1.8% in the euro area. 5

6 2.2 Interest rates - EURIBOR 6% Euribor rate MT orders (100 = 2005) 5% MT ORDERS 12M moving average 150 ECB refinancing rate 130 4% 12M EURIBOR quarterly average % 2% 3M EURIBOR quarterly average 90 1% 33% correlation between Euribor 12M & 12-month moving average of MT orders 70 0,56% 0% source: Euriobor.org + CECIMO 0,30% 0,25% 50 1Q14 3Q13 1Q13 3Q12 1Q12 3Q11 1Q11 3Q10 1Q10 3Q09 1Q09 3Q08 1Q08 3Q07 1Q07 3Q06 1Q06 3Q05 1Q05 3Q04 1Q04 3Q03 1Q03 3Q02 1Q02 3Q01 1Q01 3Q00 1Q00 3Q99 1Q99 6

7 2.3 Industrial production index MT orders in CECIMO 8 (index 100 = 2005) A 88% correlation between industrial production and MT orders (12-month rolling basis) since Industrial Production - 12M moving average 100,6 100 MT orders - 12M moving average Source: Eurostat + CECIMO 40 14Q1 13Q3 13Q1 12Q3 12Q1 11Q3 11Q1 10Q3 10Q1 09Q3 09Q1 08Q3 08Q1 07Q3 07Q1 06Q3 06Q1 05Q3 05Q1 04Q3 04Q1 03Q3 03Q1 02Q3 02Q1 01Q3 01Q1 00Q3 00Q1 99Q3 99Q1 98Q3 98Q1 97Q3 97Q1 96Q3 96Q1 95Q3 95Q1 94Q3 94Q1 93Q3 93Q1 92Q3 92Q1 7

8 2.4 GFCF 500 GFCF (Euro area 18 countries) in billion MT Orders (index 100 = 2005) Gross Fixed Capital Formation (billion ) 425,8 425, month rolling average of MT orders Q1 1995Q3 1996Q1 1996Q3 1997Q1 1997Q3 1998Q1 1998Q3 1999Q1 1999Q3 2000Q1 2000Q3 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q1 2004Q3 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 55 8

9 2.7 Foreign exchange rates 170 CECIMO Foreign Orders Index 169 1,7 Units per 1 EUR (quarterly average) 1,6 150 CHF 138 1,5 130 USD 1,41 1,4 1, JPY 1,3 1,22 1,2 90 CECIMO Foreign Orders 1, ,98 0,9 50 Source: oanda.com + CECIMO ,8 9

10 2.8 Industrial employment MT orders, 2005=100 Industrial employment growth EU28, % MT orders -0, Industrial employment growth ,

11 3.1 OECD Business Confidence Indicator (BCI) for Europe MT orders (100=2005) Business Confidence There is 83% correlation between BCI Europe+ 6 months and smoothed MT Orders in CECIMO 8 since 2001 Business Confidence 3M average with +6 month time lag , MT Orders - 12M moving average Business confidence shows a long-term trend in industrial production (with a 6-month time-lag). An increase over 100 means expansion; a decrease above 100 means a downturn; an increase below 100 is an upturn and a decrease below 100 is a slowdown 92 90,2 90 source: OECD + national associations Q14 4Q13 3Q13 2Q13 1Q13 4Q12 3Q12 2Q12 1Q12 4Q11 3Q11 2Q11 1Q11 4Q10 3Q10 2Q10 1Q10 4Q09 3Q09 2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 1Q04 4Q03 3Q03 2Q03 1Q03 4Q02 3Q02 2Q02 1Q02 4Q01 3Q01 2Q01 1Q

12 3.2 Purchasing Managers Index (PMI) - Global PMI ,7 53, , Global 35 Eurozone USA -15 source: Markit Economics + National Statistics MT orders 30 12

13 3.2 Purchasing Managers Index (PMI) - Europe PMI ,4 53,7 53, ,8 52, Eurozone Germany Italy 33 Spain Switzerland source: Markit Economics 28 13

14 3.2 Purchasing Managers Index (PMI) - Asia PMI , ,7 51,3 50, , China 39 India Japan source: Markit Economics S. Korea Taiwan

15 4 MT-IX MT-IX (index 100 = January 2005) CECIMO MTIX MT orders (Index 100 = 2005) CECIMO orders 160 There is a 68% correlation between MTIX 12 month moving average and CECIMO orders CECIMO MTIX 12-month moving average

16 5.1 CECIMO trade CECIMO exports and imports per zones Q4 EXPORTS Zone 2013Q4 2012Q4 2013Q4/ 2012Q4 Share 2013Q4 Share 2012Q4 I. ASIA % 25% 30% II. AMERICAS % 16% 16% III. EUROPE % 46% 42% CECIMO % non CECIMO % IV. Russia + CIS % 8% 8% V. OTHERS % 5% 5% TOTAL EXPORTS % IMPORTS Zone 2013Q4 2012Q4 2013Q4/ 2012Q4 Share 2013Q4 Share 2012Q4 I. ASIA % 26% 27% II. AMERICAS % 4% 4% III. EUROPE % 68% 68% CECIMO % non CECIMO % IV. Russia + CIS % 0% 0% V. OTHERS % 1% 1% TOTAL IMPORTS % 16

17 6 European Commission Forecast GDP in bn EUR in current prices Rates in the previous forecasts: 0.8% (2013) 2.8% (2014) 3.9% (2015) (Nov'13) --- 3,6% (2012) 1.1% (2013) 3.4% (2014) (May'13) 2.7% (2012) 2.1% (2013) 3.6% (2014) (March'13) --- 3,3% (2011) 2.9% (2012) 2.7% (2013) (Sept '12) 3,4% (2011) 2,8% (2012) 3,4% (2013) (May '12) Nominal GDP growth rate 0,08 3,9% ,7% 0,06 0,8% , GDP in CECIMO countries in bn EUR CECIMO GDP growth rate 0, , , Source: European Commission -0,06 17

18 6 European Commission Forecast % CECIMO production; orders change rate CECIMO orders annual growth rate CECIMO output annual growth rate EU28 GDP annual growth EU28 GDP annual growth forecast by the EC EU28 nominal GDP change rate 8% 65% 6% 4% 45% 2% 25% 0% 5% % -15% -35% There is a 66% correlation between EU28's annual GDP growth rate (in current prices) and CECIMO production -4% -6% -55% Source: European Commission; CECIMO statistics -8% 18

19 back Glossary Interest rates - Euribor Euribor (Euro Interbank Offered Rate) is the rate at which euro interbank term deposits are being offered by one prime bank to another within the EMU zone Industrial production index The objective of the production index is to measure changes in the volume of output at close and regular intervals, normally monthly. It provides a measure of the volume trend in value added over a given reference period. The production index is a theoretical measure that must be approximated by practical measures. Value added at basic prices can be calculated from turnover (excluding VAT and other similar deductible taxes directly linked to turnover), plus capitalised production, plus other operating income plus or minus the changes in stocks, minus the purchases of goods and services, minus taxes on products which are linked to turnover but not deductible plus any subsidies on products received. The division of production in construction between building construction and civil engineering is based on the classification of types of construction (CC). Statistical population: Production: sections B, C, D of NACE (D353 excluded); Base period: Year 2005 = OECD Business Confidence Indicator (BCI) for Europe The Composite leading indicators (CLI), which BCI is part of, comprises a set of component series selected from a wide range of key short-term economic indicators to ensure that the indicators will still be suitable when changes in economic structures occur in future. While theory says that a turning point in the CLI signals a turning point in the reference series, such turning points, in reality, are determined by a complicated process. Therefore, one often needs to wait for several periods to draw a more definite conclusion. A useful way to exploit the information in CLIs is to take their year-on-year growth rate. The standardised BCIs represent only the manufacturing sector. BCI shows a longterm trend in industrial production (with a 6-month time-lag). An increase over 100 means expansion; a decrease above 100 means a downturn; an increase below 100 is an upturn and a decrease below 100 is a slowdown Purchasing Managers Index (PMI) The Global Report on Manufacturing is compiled by Markit based on the results of surveys covering 9,000 purchasing executives in 30 countries. Together these countries account for an estimated 86% of global manufacturing output. Questions are asked about real events and are not opinion based. Data are presented in the form of diffusion indices, where an index reading above 50.0 indicates an increase in the variable since the previous month and below 50.0 a decrease. 4 MT-IX MTIX is and index based on the capitalization of 23 leading, publicly listed machine tool producing companies. The capitalization of the companies included is weighted by the share of machine tool turnover in total revenues. The total capitalization calculated in that way is weighted then by and estimated share of the European companies in the world total output in European Commission economic forecast European Commission Directorate General for Economic and Financial Affairs produces short-term macroeconomic forecasts twice a year, in the spring and autumn. These forecasts concentrate on the Member States, the euro area and the EU, but also include outlooks for candidate countries as well as some non-eu countries. Each forecast has at least a two-year time horizon (with an additional year added 19

20 Glossary back 4 each autumn) covering the current year and the next. The forecasting process considers a total of 180 variables and is the result of several iterative rounds. The forecasts are not based on a centralised econometric model. Instead, they result from analyses made by the DG ECFIN country desks, each of which uses statistical methods to varying degrees. The forecasts are checked for consistency, in particular as regards trade flows. The EU and euro-area variables are not a direct forecast, but are obtained by aggregating the individual Member State forecasts. In between the fully-fledged spring and autumn forecasts, interim forecasts are produced in which an update of real GDP growth and inflation is estimated for the seven largest Member States and for the current year only. The interim forecasts are largely prepared using indicator-based models. The weights of the Member States in the EU and euro area aggregates can be found through the link below. 20