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Economy in Brief

Euro-Area PMIs Rise Sharply Other Things Unravel…
by Robert Brusca March 24, 2010

TheEuro-Area PMIs rose sharply in March. For MFG the index reached a new post recession high, it s strongest level since January 2007. For services, the 1.68 point rise to 53.65 brings it close to its cycle high reading of 53.71 and it stops a string of two months of declines. 

The services index is in the 62nd percentile of its 136 month range; the MFG index is in the 84th percentile of it range. 

In addition to all this good news, separately, the German IFO index moved sharply higher, confirming goods news in Germany. The European economy is giving off signals of real strength and brushing off notions that the recovery there was falling on hard times. Still the euro is falling.

The bad news on the day that has dragged down the euro, was the downgrade to Portugal by Fitch. Meanwhile, France and Germany seem to have to come to some agreement about letting the IMF assist Greece in some way. We are all waiting to hear more on this. 

With the geopolitics of Europe seemingly dry tinder and sparks flying everywhere, the news of better growth in the Zone is like news of a refreshing spring shower that will damp the risks of spontaneous combustion. There is still a long way to go to get Europe back to where it needs to be. And the problems in Greece and the knock-on effects there have exposed some animosities within the Zone that may have long term effects on it. They could affect not only the Zone’s appetite for expansion but also the perception of the attractiveness of membership in the Zone by potential EMU candidate countries.

FLASH Readings
Markit PMI's for the Euro-Area
  MFG Services
Mar-10 56.34 53.65
Feb-10 54.23 51.81
Jan-10 52.39 52.50
Dec-09 51.59 53.63
Segment Averages
3-Mo 52.74 52.65
6-Mo 51.57 52.86
12-Mo 46.50 49.60
High 60.47 62.36
Low 33.55 39.24
% Range 84.7% 62.3%
Range 26.92 23.12
Average 51.13 53.64
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