Monday, March 5, 2012

5/3/2012: Profit Margins in Services and Manufacturing: February PMI

In the previous three posts I covered Manufacturing PMI, Services PMI and employment sub-indices from February 2012 PMIs releases. In this post we shall take a look at profit margins in both Services and Manufacturing.

All original data is courtesy of NCB, with analysis provided by myself. Indices reported below are derived by me on the basis of proprietary models.

Chart below clearly shows the dynamics in profitability across two sectors:

  • Based on movements in Services index components for input costs v output charges, profit margins index in the sector has posted slightly slower rate of deterioration in February (-14.23) against January (15.08). This marks the second consecutive month of slower declines in profit margins. Thus, 12mo MA stands at -17.0 and 3mo MA through February 2012 is at -15.9, an improvement on previous 3mo MA of -16.4.
  • Profit margins conditions in Manufacturing have deteriorated in February (-22.31) compared to January 2012 (-17.67) marking the 5th consecutive month of deepening declines. Thus, 12 moMA is now at -17.2 and 3mo MA at -18.7 against previous period 3mo MA at -11.1.

So tougher conditions for profitability in both sectors and, in line with that, tougher stance on employment front.

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