US manufacturing sector still shrinking; prices rebound. US manufacturing activity contracted for a fourth consecutive month in February, albeit showing signs that factory output was beginning to stabilise, with a measure of new orders rebounding from a more than 30 month low. The closely watched Institute of Supply Management (ISM) Manufacturing Index, a gauge of the prevailing direction of economic trends in the manufacturing sector, inched higher to 47.7 from 47.4. This reading however came in below expectations of 48 and also below the 50 level that separates expansion from contraction. The Prices Paid sub-index of the ISM was in focus for signs that inflation is cooling. Timothy Fiore, chair of the ISM’s Manufacturing Business Survey Committee, explained that the group’s prices index shot up to 51.3 percent, a jump of 6.3 points from January, and well above estimates. He added the sub-index moved into “increasing” territory after registering “decreasing” For four straight months.

UK house prices fall by most since 2012. House prices in Britain saw their sharpest annual fall since 2012, last month, steepening a downturn caused by spiking mortgage rates. Property prices fell by 1.1 percent in February compared with the same month last year. That is down from a 1.1 percent increase in January, mortgage provider Nationwide said on Wednesday. Economists had forecast a 0.9 percent contraction. The February decline in real estate prices is the first annual contraction since the initial Covid-19 lockdown in June 2020.The recent series of weak house price data in Britain kicked off with the financial market turbulence caused by the Truss mini-Budget at the end of last September. Nationwide said it was hard to predict when the housing market might regain momentum because “economic headwinds look set to remain relatively strong”.

German inflationary pressures persist. German consumer prices, harmonised to be comparable with other EU countries, rose more than anticipated in February, data by Destatis showed on Wednesday, indicating no easing in the stubborn price pressures and fanning European Central Bank (ECB) rate hike expectations.  The harmonized index of consumer prices (HICP), edged up slightly to 9.3 percent in February from 9.2 percent the previous month. The expected rate of price growth was nine percent. Month-on-month, the HICP grew by one percent, faster than the forecast of 0.7 percent. If core inflation remains persistently high in the currency bloc, the ECB will have no option but to continue hiking rates pushing forward future rate cuts.

China’s economy rebounds strongly as Covid era ends. China's manufacturing activity grew at the fastest rate in more ten years in February, official data showed on Wednesday, as production skyrocketed after the lifting of Covid-19 lockdowns late last year. The official manufacturing purchasing managers’ index (PMI) rose to 52.6 in February, above the 50-point mark that separates expansion from contraction and the highest reading since April 2012, when it hit 53.5. February’s print is also higher than the 50.1 reported for January and above expectations of 50.5. The figures add to signs of a rebound in the economy and provide the first comprehensive data of the economy’s recovery after Beijing’s u-turn in Covid restrictions late last year, infection waves began easing and businesses returned to normal after the Lunar New Year holidays.

Inflation in Australia slowed in the year to January 2023 as millions continue suffer a high cost of living. Fresh data from the Australian Bureau of Statistics (ABS) show that the monthly consumer price index rose 7.4 percent in the twelve months to January 2023, lower than the 8.4 percent rise reported in December 2022. The major contributors to the annual increase were housing, food and non-alcoholic beverages and recreation and culture.

In case of any queries, please email us on [email protected] or call on 2275 3857.