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With the October PMIs [having all been reported] I had another look at what to expect on the economic front
with regard to economic growth in the major economic regions [Eurozone, U.S., Japan, China and the U.K. – and it is a mixed bag, to say the least. Let’s take a look at a few charts.] Words: 475
So says Prieur du Plessis (www.investmentpostcards.com) in edited excerpts from an article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) below for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
du Plessis goes on to say, in part:
Eurozone
The outlook for the eurozone is grim…The eurozone is therefore firmly in the grip of a recession.
(Click charts to expand)
Sources: Dismal Scientist; Markit; Plexus Asset Management
The German IFO Business Expectations Index indicates that the eurozone economy will face further headwinds going into the first quarter next year.
Sources: Dismal Scientist; Markit; Plexus Asset Management
USA
In the U.S. the current level of the ISM GDP-weighted PMI (manufacturing and non-manufacturing) is consistent with year-on-year GDP growth of 1.5 – 2.0%. I expect year-on-year growth of about 1.75% in the fourth quarter – up slightly from 1.6% in the third quarter. On a quarter-on-quarter annualized basis I therefore expect a slight acceleration to 2.86% from 2.46% in the third quarter.
Sources: Dismal Scientist; Markit; Plexus Asset Management
Japan
Japan’s GDP probably stopped contracting in the third quarter and may have expanded for the first time since the third quarter of last year. The manufacturing PMI also indicates a further but tepid expansion in the Japanese economy.
Sources: Dismal Scientist; Markit; Plexus Asset Management
China
The GDP-weighted CFLP PMI (manufacturing and non-manufacturing) for China indicates further weakening of GDP growth on a year-ago basis to below 9%.
Sources: Dismal Scientist; CGLP; Li & Fung; Plexus Asset Management
The fortunes of China’s economy and especially the manufacturing sector remain closely tied to those of Japan.
Sources: CFLP; Li & Fung; Markit; Plexus Asset Management
United Kingdom
The U.K. economy is heading for a recession. The GDP-weighted PMI that I calculate indicates that year-on-year GDP growth in the fourth quarter has stagnated, if not contracted. I estimate that the economy has probably contracted by approximately 1% or an annualized rate of more than 4% from the third quarter.
Sources: Dismal Scientist; Markit; Plexus Asset Management
To summarize:
- Japan: expanding at last
- China: growth slowing
- U.S.: slight acceleration in growth
- Eurozone: in deepening recession
- U.K.: entering recession
*http://www.investmentpostcards.com/2011/11/09/outlook-for-major-economies-mixed-bag/
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