‘Global Synchronous Recovery’ Narrative Crushed As US, EU PMIs Plunge

Thursday, March 22, 2018
By Paul Martin

by Tyler Durden
ZeroHedge.com
Thu, 03/22/2018

Following the collapse of Europe’s Composite PMI (to 14-month lows), >US Composite PMI slipped notably from one-year highs. So much for the ‘global synchronous recovery’ narrative.

Commenting on Europe’s flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“While the first quarter average PMI reading remains relatively robust, indicative of GDP rising by 0.7-0.8%, the loss of momentum since the buoyant start to the year has been quite dramatic.

“At least some of the slowing may be ascribed to bad weather in some northern regions and, perhaps more importantly, ‘growing pains’ resulting from the strength of the recent growth spurt. Supply chain delays and raw material shortages were often reported to have stymied production in manufacturing (delays in German supply chains are currently more widespread than at any time in the survey’s 22-year history), and both manufacturing and services sectors also saw activity being curtailed by growing incidences of skill shortages. Backlogs of work continue to rise as a result of these growth constraints.

“However, other factors are clearly at play. The fact that export order book growth has more than halved since the end of last year suggests the stronger euro is taking an increasing toll on export performance. Survey responses also highlighted how political uncertainty also appears to have intensified, dampening demand.

“The data therefore suggest that eurozone growth peaked around the turn of the year and the region is settling into a slower, but still robust pace of expansion. Price pressures have meanwhile also eased slightly, in part linked to cheaper imports arising from the euro’s recent strength, but remain elevated.”

The Rest…HERE

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