The worst for the global economy is behind

Дата: 02.06.2020 09:22:46

A portion of business activity indexes (PMIs), published in several countries at once, demonstrates that the worst for the global economy is behind. The first data today came from China, where the May index was 50.7 points. This is above April 49.4 and above consensus forecasts. A PMI above 50 points indicates an increase in business activity, below - a decline. The last time the index was above this mark in February.

The second important block of statistics came from Europe. The countries of southern Europe, which are in the midst of quarantine, are recovering at a faster pace. In general, the eurozone showed a PMI of 39.4 points, which is close to forecasts, but significantly higher than the April 33.4 points (this was an absolute historical minimum for all 22 years of observation). Of the individual countries that were included in the composite index, it is worth noting Germany, where the PMI was below the eurozone average of 36.6 points. This is slightly lower than the values ​​laid down in the consensus forecasts, and does not significantly exceed the April 34.5 points.

More indicative are data from France, Italy and Spain. There, the PMI turned out to be 40.6 points; 45.4 points and 38.3 points respectively. In all three cases, it is better than the forecast and much higher than the April 30-31. The drivers of business activity were deferred demand and the removal of the bulk of quarantine measures (in these countries the regime was tougher). Most notably, the growth of PMI was not accompanied by new waves of the epidemic, even at the local level. All this positively affected the mood of the business.

We believe that June could show a sharp shift in business activity around the world. Eurozone has high chances to go above 50 points after China. Russia will go with some lag. In May, the Russian PMI was 36.2 points compared to April 31.3. But in connection with the expectation of rising oil prices in early summer, the country may even overtake Western countries in its dynamics. However, it is worth noting that PMI is a leading indicator, and it does not show real production growth, but only predicts it most likely in the coming months. For this reason, June may well show a decrease in GDP both in the European region and in most countries of the world. But from the second half of the year the upward trend in production will prevail.

source: https://www.finam.ru/analysis/marketnews/xudshee-dlya-mirovoiy-ekonomiki-pozadi-20200601-20200/?utm_medium=referral&utm_source=lentainform&utm_campaign=finam.ru&utm_term=1287083&utm_content=8559356&utm_site=540570