Thursday, May 15, 2014

15/5/2014: PMIs and actual activity: something is still amiss...


Services Activity vs Services PMIs... something is seriously amiss... still...


Notice how the activity has fallen in Q1 2014 compared to Q1 2013 and yet PMIs expanded even further into growth territory?..

Notice how in ALL 1st quarters since 2011 (recovery on-set), PMIs grossly over-estimated actual changes in Services Activity, signalling slower growth in Q1 2012 y/y against actual activity rising sharply, signalling greater growth in Q1 2013 against actual growth rate falling short of PMI-signalled one, and lastly completely contradicting actual outrun in Q1 2014.

Notice how since the onset of the 'recovery' - PMIs-consistent average growth (vertical reading on the trend line, for every underlying level of PMIs) is always below actual activity recorded...

Go figure the puzzle, but my suspicion is that the survey is skewed too heavily to MNCs...

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