The October value of the Global Composite Purchasing Managers Index (PMI), calculated by J.P. Morgan, increased slightly (from 53.3 to 54.5) as optimism in the service sectors of the global economy rose sharply (from 53.8 to 55.6), while the manufacturing PMI remained almost unchanged (it grew from 54.1 to 54.3). In the case of manufacturing PMI, the estimate of current production, as well as new orders, decreased slightly (meaning slightly lower growth than in previous months).

GDP in the EU-27 strengthened by 2.1% in the Q3 2021 and by 2.2% in the EA-19 compared to the previous quarter, which was above our expectations (2% for EA-19). According to provisional data for 11 economies, representing 91% of EU-27 GDP, growth accelerated in Spain (from 1% in the 2nd quarter to 2%) and France (from 1.3% to 3.0%), while it slowed in Germany (from 1.9% to 1.8%).

October’s reading of economic sentiment index (2.2 points) decreased by 2.5 percentage points compared to September what is more than we expected (a rather modest decrease from 4.7 to 4.0). The monthly change in the index was negatively affected mainly by the confidence indicator in manufacturing (by 2.0 percentage points), the consumer confidence indicator (by 0.7 percentage points) and the confidence indicator in retail trade (by 0.4 percentage points).

As expected, exports of goods fell from EUR 3.5 billion (July figure) to EUR 2.8 billion in August, which is mainly due to the seasonal effect (manufacturing company usually have collective holidays in August). Compared to August 2020, exports were a quarter higher.

In September 2021, the economic sentiment/climate was 1.8 percentage points lower on a monthly basis (our estimate: -0.9%), while it was still 8.5 percentage points higher on an annual basis. Its change was negatively affected by confidence indicators in manufacturing (by 1.3 percentage points), in retail trade (by 0.7 percentage points) and among consumers (by 0.2 percentage points). The effects of confidence indicators in services and construction were positive (each contributing 0.2 percentage points).

As expected, in the autumn forecast, IMAD (Institute of Macroeconomic Analysis and Development) significantly improved its estimate for Slovenia’s real GDP growth in 2021, from 4.6% to 6.1%, which is one of the historically largest positive adjustments in terms of growth prospects.

Compared to the previous month, July’s growth of industrial production was negative (-1.7% vs our estimate: -1.0%), while year-on-year (compared to July 2020) it was 8.9% higher. As expected, growth slowed down (it was 15% higher year on year in the 1H 2021) to 13% in the seven months of 2021. In mining, industrial production was down 2.6% year on year in the same period, in energy by 1.5%, but in manufacturing it was higher by about 15%.

November data on exports (1 week ahead of Eurostat release) from Slovenian Statistical Office shows that trends have improved in final months, what was expected based on improving sentiment in manufacturing as well as anecdotal data from main companies. Y-o-y change (Nov. 20/Nov. 19) was positive (+0.9%; +EUR 30 m), for both group of markets (exports to EU: +EUR 20 m and exports to non-EU: +EUR 10 m).

The global production index JP Morgan Global Manufacturing showed that the sentiment in global manufacturing at the end of July (55.4) was quite similar to that in June (55.5), or that the rise in infections in some major countries did not contribute to deteriorating expectations of future or current operations. All three main types of manufacturing recorded growth, the slowest the category of consumer goods products, where growth accelerated. The highest sentiment in manufacturing was in the Netherlands, Germany, Austria, USA, while on the other hand, China (50.3) and Japan (53) were well below the average. Asia’s emerging markets were particularly weak, with activity in Thailand, Malaysia, Vietnam, Indonesia and Myanmar even declining.

GDP in the EU-27 increased by 1.9% in the Q2 21 compared to the Q1 21 (in the EA-19 by 2%, Reuters Consensus: +1.5%), which was more than we expected (1.4%). Among the 11 countries for which data are already available, the highest growth was recorded in Portugal (+ 4.9%, where, by the way, the fall in GDP was high in the Q1 21, at -3.2%) and in Austria (+4.3%). Growth was also high in Latvia (+3.7%) and Spain (+ 2.8%). GDP in Europe's largest economy - Germany, strengthened by 1.5% (after a 1.8% drop in the 1st quarter of 2021), growth in France was disappointing (0.9% after unchanged growth in the Q1 2021).