German Business Activity
Germany’s Purchasing Managers’ Index (PMI) faltered in April, as the nation could not escape the troubles across the European Union that have done more damage than can be measured by this sort of statistic. Clearly there is not enough demand for German products in places like the United States and China to offset the pull of gravity in Europe. If Germany faltered, based on PMI, then the rest of the region is still crumbling. According to Markit data for the eurozone:
The Markit Eurozone PMI Composite Output Index was unchanged on March’s reading of 46.5 in April, according to the flash estimate. The sub-50 reading indicated a drop in activity for the nineteenth time in the past 20 months, the exception being a marginal increase in January 2012.
Divergent trends were evident in the region’s two largest member states. While France saw the rates of decline in both business activity and new business ease sharply to the slowest for four and eight months respectively, Germany saw both activity and new business fall at the steepest rates for six months. The drop in German activity was also notable in being the first since last November. Elsewhere across the region output fell at the slowest rate for three months in April, though the rate of loss of new business remained marked.
China Manufacturing Activity
Another one of the world’s power houses — China — did not do much better than Germany as measure by PMI. The fact that both stumbled reinforces the notion that the economy of the entire world has slowed down. Data from Japan has not been strong recently. That leaves the United States as the only country that might be relatively healthy. The China PMI data from Markit showed:
The HSBC Manufacturing PMI fell from 51.6 in March to 50.5 in April, according to the flash estimate produced by Markit, only a shade higher than February’s four-month low of 50.4. The above-50 reading means manufacturing conditions have now improved for six successive months but that the rate of expansion at the start of the second quarter slowed to near-stagnation.
With the April PMI coming in below the first quarter average of 51.5, the latest survey raises the possibility that growth in the manufacturing-dominated Chinese economy slowed further from the disappointing 7.7% annual rate of GDP expansion seen in the first quarter.
The weakness of the PMI also points to the possibility of a further slowdown in industrial production, after disappointing official data showed output growing at an annual rate of just 8.9% in March. While such a rate would be envied by developed economies, the rate of growth was the weakest seen since May 2009.
The April survey showed output and new orders growing at slower rates than in March and during the first quarter as a whole.
Apple Patent Victory
The patent and intellectual property lawsuits among the world’s leaders in consumer hardware and software products may never end. They have involved, at the very least, huge legal actions by Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), Microsoft Corp. (NASDAQ: MSFT) and Samsung. The latest round of matches went to Apple. According to Reuters:
Apple Inc scored a win on Monday when the U.S. International Trade Commission ruled that it did not violate a Google patent to make the popular iPhones.
Apple had initially been accused of infringing on six patents for iPhone-related technology covering everything from reducing signal noise to programming the device’s touch screen so a user’s head does not accidentally activate it while talking on the phone.
If Apple had been found guilty of violating the patent, its devices could have been banned from being imported into the United States.