Germany's manufacturing sector growth slows in April

4 May4:45 PM

[BERLIN] Growth in German manufacturing lost some momentum in April but remained in good shape overall, a survey showed on Monday, suggesting it had a slow but steady start.

Markit's purchasing manager's index (PMI) for manufacturing, which accounts for about a fifth of the German economy, slipped to 52.1 from an 11-month high of 52.8 in March.

It was above the 50 line separating growth from contraction for a fifth consecutive month and the final reading topped a preliminary estimate of 51.9. "Germany's manufacturing sector shifted down a gear in April," said Markit economist Oliver Kolodseike.

It was, however, the second-best reading in nine months and Mr Kolodseike said this pointed to "modest growth in the sector".

New orders continued to flow in, albeit at a slower rate than in March, and output growth slowed, but manufacturers stepped up their recruitment of new staff.

While the weaker euro helped some companies to obtain new contracts from abroad by reducing the cost of their goods for customers outside of the euro zone, it also pushed up import costs for the first time in 15 months.

Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.

REUTERS

    
 

US factory orders post largest gain in 8 months

4 May10:27 PM

[WASHINGTON] New orders for US factory goods recorded their biggest increase in eight months in March, boosted by demand for transportation equipment, but the underlying trend remained weak against the backdrop of a strong dollar.

The Commerce Department said on Monday new orders for manufactured goods increased 2.1 per cent, the largest gain since July last year, after a revised 0.1 per cent dip in February.

Economists polled by Reuters had forecast orders rising 2.0 per cent in March after a previously reported 0.2 per cent gain in February. Orders excluding transportation were flat in March after edging up 0.1 per cent in February.

Manufacturing has been hit by the strong dollar and lower crude oil prices, which are putting a squeeze on the profits of multinational corporations and oil firms.

The department also said orders for non-defense capital goods excluding aircraft - seen as a measure of business confidence and spending plans - edged up 0.1 per cent instead of the 0.5 per cent drop reported last month.

Shipments of non-defense capital goods orders excluding aircraft, used to calculate business equipment spending in the gross domestic product report, declined 0.4 per cent as previously reported.

REUTERS

    
 

Singapore's April manufacturing PMI contracts further

By

Teh Shi Ningtshining@sph.com.sg@TehShiNingBT

Singapore's manufacturing sector contracted for a fifth consecutive month in April, according to the latest purchasing managers' index (PMI). 

PHOTO: SPH

4 May9:04 PM

SINGAPORE'S manufacturing sector contracted for a fifth consecutive month in April, according to the latest purchasing managers' index (PMI).

The barometer of industrial activity registered its lowest reading in over two years in April - 49.4. This was further below the 50-point threshold dividing growth from contraction than March's PMI of 49.6.

The electronics PMI too, fell back into contraction territory after a March reading of 50.1. At 49.1, April's reading was the lowest that the electronics PMI has been since December 2012.

Further declines in new orders, both locally and from abroad, were the main reasons for the overall fall in the PMI, said the Singapore Institute of Purchasing & Materials Management (SIPMM), which compiles the monthly index by surveying purchasing managers at more than 150 industrial firms.

Production output also sank back into contraction, as inventory, stocks of finished goods and employment continued to fall, SIPMM added.

Manufacturing's performance has been weak so far this year. The latest available data from the Economic Development Board (EDB) shows a 5.5 per cent drop in factory output in March, the sharpest decline in two years.

But the EDB's quarterly business expectations survey, released last week, showed that local manufacturers had turned more optimistic about business prospects in the next six months.

    
 

FERC gets US high court hearing on energy-conservation rule

4 May10:06 PM

[WASHINGTON] The Obama administration will get a US Supreme Court hearing as it tries to save a rule that rewards industrial consumers for cutting electricity use.

The rule, opposed by the power industry, benefits smart- grid companies such as EnerNOC Inc that help large electricity consumers reduce their power usage during peak-demand hours. It's also backed by large power consumers, including Alcoa Inc and Wal-Mart Stores Inc, that are eyeing millions of dollars in energy savings.

A federal appeals court said the Federal Energy Regulatory Commission lacked authority to issue the rule. It requires wholesale-market operators to pay electricity users that cut consumption during high-demand periods at the same rate as generators that produce power. The practice, known as "demand response," means stiffer competition for generators.

Unless blocked, the rule will have its biggest impact on American Electric Power Co, CMS Energy Corp and Duke Energy Corp., the companies with the most wholesale electricity sales, according to Bloomberg Intelligence analyst Brandon Barnes.

The 13-state mid-Atlantic grid, which has the highest amount of demand response of all the regional markets, paid US$17.7 million for consumers to cut their electricity use in 2014, according to Monitoring Analytics LLC, based in Eagleville, Pennsylvania, which oversees the market.

Advocates of demand response say it can cut air pollution and reduce the need to build additional power plants. Power plant owners that opposed the FERC plan say it is too generous to energy consumers.

Demand response helped the grid maintain reliable service when the system faced potential supply shortages during the Polar Vortex in January 2014, according to PJM Interconnection LLC, which manages the mid-Atlantic network.

The court fight centers on the reach of FERC's authority. Federal law lets the commission regulate rates only at the wholesale level, leaving retail regulation in the hands of the states.

FERC and the Obama administration contend that the rule applies only to wholesale rates and to demand-response providers that are participating in that market. A divided federal appeals court in Washington rejected that reasoning, saying that demand response by definition "involves retail customers, their decision whether to purchase at retail and the levels of retail electricity consumption." That appeals court decision was poised to take effect and void the rule had the Supreme Court not intervened.

BLOOMBERG