Information Economic Outlook leading indicators at a glance July 217 www.vbw-bayern.de
bayme vbm vbw July 217 Contents X Table of Contents 1 Germany... 1 2 Eurozone... 2 3 World Economy... 3 Appendix: Descriptions of leading indicators... 4
bayme vbm vbw July 217 Germany 1 1 Germany Leading indicators continue to excel With almost no exception, leading indicators for the German economy are at a very high level and in some cases continue to rise. In June, the Ifo Business Climate Index (Ifo-Geschäftsklimaindex) again hit its all-time high. Both the assessment of the situation and the expectations improved. The Purchasing Managers Index for the German Industry (Einkaufsmanagerindex) also rose slightly by.1 to 59.6 points, the highest level since 211. The Economic Sentiment Indicator improved, too to the highest level in six years. According to the toll statistics, truck traffic has grown significantly. Only the ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) as well as the sentix Economic index slightly declined, but particularly the latter one from a very high level. ifo-business Climate Index Germany manufacturing, construction and trade, 25 = 13 12 11 9 Business Climate Assessment of business situation Business expectations Purchasing Managers' Index Germany, manufacturing, 5 = no change 65 55 5 45 35 3 7 Source: ifo Institut Economic Sentiment Indicator, Germany 25 = 13 12 11 9 7 Source: Eurostat 25 Source: MarkIT ZEW-Indicator of Economic Sentiment Germany 2-2 - - - Source: ZEW Truck kilometers traveled and industrial output, Germany Difference from same month last year kilometers traveled (1 month delay) sentix Economic Index, Germany Range: - to + Current Situation Expectations Overall Index 2% industrial output (3-month average) 2% 15% 15% 1% 1% 5% % -5% -1% -15% 5% % -5% -1% -15% -2% 2-2 - -2% 28 29 21 211 212 213 214 215 216 217-25% - Source: sentix 29 21 211 212 213 214 215 216 217 Source: German Federal Office for Goods and Transport (BAG), Destatis.
bayme vbm vbw July 217 Eurozone 2 2 Eurozone Leading indicators continue to go up The early indicators for the euro zone continue to rise. Thanks to a better assessment of the situation, the Sentix Economic Index (sentix-konjunkturindex) continued to improve slightly. However, the expectations slowed down somewhat. The Economic Sentiment Indicator (ESI) went up to the highest level in ten years for both the Eurozone and the EU as a whole. At the same time, the Purchasing Managers Index for the Industry (Einkaufsmanagerindex) continued to grow to 57.4 points. The ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) also rose moderately. The most recent quarterly Ifo Index for the Eurozone was published in May. The balance of positive and negative assessments rose from +17.2 to +26.4 percentage points. The balance on the current situation improved from +8. to +21.9 points, the balance of the expectations increased from +26.9 to +31. points. sentix Economic Index, Eurozone Economic Sentiment Indicator Range: - to + Current Situation Expectations Overall Index 25 = EU Eurozone 12 11 2 9-2 - - 7 - Sorce: sentix Source: Eurostat Purchasing Managers' Index, Eurozone manufacturing, 5 = no change 55 5 45 35 3 Source: MarkIT ZEW-Indicator of Economic Sentiment Euro area 2-2 - - - Source: ZEW ifo Economic Climate for the Eurozone balances Economic climate Assessment for economic situation Expectations for the next 6 months 2-2 - - - - Source: ifo Institut
4.1.216 4.2.216 4.3.216 4.4.216 4.5.216 4.6.216 4.7.216 4.8.216 4.9.216 4.1.216 4.11.216 4.12.216 4.1.217 4.2.217 4.3.217 4.4.217 4.5.217 4.6.217 Information Economic Outlook - Leading indicators at a glance bayme vbm vbw July 217 World Economy 3 3 World Economy Most early indicators show positive development The global early indicators send positive signals, too. The OECD business climate index (OECD-Geschäftsklima) improved slightly and remains at its long-term average level. The German Federal Bank s leading indicator (Bundesbank Frühindikator) for the world economy also rose, but at an increasingly weaker pace. The Purchasing Managers Index for the global Industry (Einkaufsmanagerindex) grew by.6 points to 54.7 points, clearly above the growth threshold of 5 points. The Container Throughput Index improved as well, while the Baltic Dry Index continued its decline. The most recent quarterly Ifo Index for the world economy was published in May. The index continued to improve from +2.6 to +13. percentage points. The balance of the assessment of the current situation left the negative range behind and increased from - 9.1 to +4.7 points. The expectation balance improved from +15. to +21.6 percentage points. OECD composite leading indicator long-time average =, seasonally adjusted 14 Bundesbank leading indicator for the world economy long-term avarage = 14 12 12 98 98 96 96 94 Source: OECD 94 Source:Bundesbank Purchasing Managers' Index manufacturing, worldwide, 5 = no change; weighted average of Eurozone, UK, USA, Japan, China, India, Brasil and Russia ifo World Economic Climate Balances Economic climate Assessment of economic situation Expectations for the next 6 months 5 2-2 - - 3 Sources: ISM, CFLP, MarkIT, ow n calculations. - Source: ifo Institut 28 29 21 211 212 213 214 215 216 217 Baltic Dry Index Container Throughput Index and World Trade 216/217 seasonally adjusted, 28 = RWI/ISL -Index World Trade 1. 1 1.2 13 1. 12 11 9 2 28 29 21 211 212 213 214 215 216 217 Source: bloomberg Sources: RWI, Netherlands Bureau for Economic Policy Analysis
bayme vbm vbw July 217 Appendix: Descriptions of leading indicators 4 Appendix: Descriptions of leading indicators The Ifo Business Climate is a widely observed leading indicator for economic development in Germany. It is based on ca. 7, monthly survey responses of firms in manufacturing, construction, wholesaling and retailing. The Ifo Index for the Economic Climate in the Eurozone as well as the ifo World Economic Climate Index are based on a survey of 1, or 3 economic experts respectively. The Purchasing Managers Index (PMI) for the German Industry (Einkaufsmanagerindex) is based on estimations by purchasing managers of industrial companies. The PMI for the Industry in the world economy is calculated by us. It conveys the average of the PMIs of the Eurozone, the USA, the UK, Japan, China and Brasil, weighted according to their share of world GDP. The European Economic Sentiment Indicator is based on a survey of businesses from industry, trade, construction as well as service providers and consumers. The ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) is based on a survey of over 3 financial experts. The toll statistics account for the mileage of trucks that are liable to tolls on German autobahns measured in kms. The change of the amount compared with the same month of the previous year (adjusted for the calendar effect) serves as an indicator. The Sentix Economic Index (sentix-konjunkturindex) is based on a survey of 2,5 private and institutional financial market participants. The OECD business climate index (OECD-Geschäftsklimaindex) is the weighted average of business climate indexes from 33 countries and is based on company surveys (OECD-members such as Brazil, China, India, Indonesia, Russia and South Africa). The German Federal Bank s leading indicator (Bundesbank Frühindikator) for the world economy is made up of several global indicators (Purchasing Managers Index for industry, Purchasing Managers Index for services, consumer climate for the current economic situation, consumer climate for business expectations, S&P Global 12 stock index). The Baltic Dry Index is an important price index for tracking international shipping costs for dry bulk commodities. The Container Throughput Index is a joint project of the Rheinisch-Westfälisches Wirtschaftsforschungsinstitut (RWI) and the Institute of Shipping Economics and Logistics (ISL). It is based on market observations in 72 international ports that together make up about percent of the worldwide container handling of manufactured goods.
bayme vbm vbw July 217 Contact / Imprint 5 Volker Leinweber Head of Economics Telefon 89-551 78-133 Telefax 89-551 78-294 volker.leinweber@vbw-bayern.de Imprint As a general rule, all information provided in this publication relates to both the female and male form. To facilitate readability, specific reference to the female form was in most cases dispensed with. Publisher: bayme Bayerischer Unternehmensverband Metall und Elektro e. V. vbm Verband der Bayerischen Metall- und Elektro-Industrie e. V. vbw Vereinigung der Bayerischen Wirtschaft e. V. Max-Joseph-Straße 5 333 München www.baymevbm.de www.vbw-bayern.de bayme vbm vbw July 217