Central Europe's factories continue to outshine Eurozone

By bne IntelliNews April 1, 2016

Forward looking data on Central Europe’s vital manufacturing sector presented a mixed picture on April 1, though overall,the region’s purchasing manager indices (PMI) remain in expansionary territory, and continue to suggest resilience to the stuttering recovery in the Eurozone and troubles in emerging markets.

Poland’s PMI performed better than expected as it swelled to 53.8 in March from 52.8 in February, the fastest growth in eight months, compiler Markit reported. The “better than expected outcome mainly resulted from faster growth of output, new orders, exports and employment", notes BZWBK in a note.

The Czech reading pulled back, to 54.3 in March from 55.5 in February, but remains relatively high. "Czech PMI remains at high levels and still points to very solid expansion of the manufacturing sector,” points out RBI.

Hungary’s reading was the biggest surprise, as it dropped to 51.7 points in March from 54.8 in February, according to the Hungarian Association of Logistics, Purchasing and Inventory Management (HALPIM) reported. While the country’s locally compiled PMI is seen as a poor guide to eventual industrial production, it’s descent towards the 50-point threshold separating expansion from contraction still appears to reflect recent weak output data.

Still, overall the data was well received, as it suggests the region’s factories continue to shrug off weakness in the Eurozone, which provides the vast bulk of export demand. The single-currency area’s composite PMI perked up slightly, coming in at 51.6 in March.

While that was an improvement of 0.2 points over the February reading, it still represents the second-weakest improvement in manufacturing conditions for just over a year.

While the German reading continues to hover only marginally above the stagnation mark, it is showing signs of stabilization after recent falls. That will be particularly welcome in Central Europe given the region’s large role in the supply chain for the EU’s biggest economy.

“The fact that the Polish PMI rose further supports our view that it will be one of the best performing economies in the region this year,” writes William Jackson at Capital Economics.

“On past form, our [composite] Central Europe PMI points to industrial production growth of a little over 5% y/y in the months ahead, up from around 4.5% y/y in early 2016,” the analyst points out. “That’s particularly encouraging in light of some of the softer survey data in Q1 from key Eurozone trading partners.”

Related Articles

Hungarian PM's "proxy" moves into the nuclear industry as Paks tenders approach

Firms controlled by Hungarian oligarch Lorinc Meszaros have purchased a 51% stake in the Hungarian subsidiary of Czech nuclear ... more

Czech PM accepts new nominee for finance minister

Reducing the political tension in the country a little, Czech Prime Minister Bohuslav Sobotka accepted on May 17 the nomination of a new finance minister from coalition partner Ano. Meanwhile, ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss