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Europe’s Economic Indicators Steady Despite Global Slowdown

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Europe’s economic indicators

Previously, we saw that housing permits increased for three consecutive months in the European Union (or EU). In this part, we will look at the manufacturing PMI and vehicle sales in Europe. The automobile and industrial sectors are among the major consumers of steel products.

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Manufacturing PMI

The above chart shows the manufacturing PMI in Europe. PMI figures are released on a monthly basis by Markit. Readings above 50 generally indicate economic expansion, while readings below 50 indicate a contraction. The February 2015 PMI in Europe was 51. The manufacturing PMI in Europe has held above 50 for several months.

A PMI above 50 presents a solid argument for future economic growth in Europe. The Vanguard FTSE Europe ETF (VGK) gives you access to the European equity markets.

Vehicle registrations

February vehicle registrations in the EU increased 7.3% on a year-over-year basis. In 2014, ArcelorMittal (MT), a leading supplier to the automobile sector, shipped 13 million tons of steel products to automobile companies. AK Steel (AKS) and Allegheny Technologies (ATI) are other leading suppliers to the automobile industry. AK Steel gets more than half of its revenues from automobile companies.

Rising vehicle sales in Europe are positive for ArcelorMittal and US Steel (X), which also have operations in Europe.

Europe’s economic indicators have been steady so far in 2015, while the economic data from China has been worsening. However, the European steel industry has been reeling under the impact of increased steel imports from China and Russia.

You can learn more about the steel industry by visiting the Market Realist steel page.

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