Week Ahead Economic Preview: Week of 27 November 2023

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Worldwide manufacturing PMIs, plus US and Eurozone inflation

Worldwide manufacturing PMI will be due December 1 following the release of flash PMI figures, while tier-1 official data releases include eurozone inflation and updated Q3 GDP figures out of the US, Canada and India. Additionally, the US also issues core PCE and ISM Manufacturing PMI.

Global manufacturing PMI releases will be eagerly watched for more detailed updates on the performance of the good producing sector in November. This comes after flash PMI data from major developed economies mostly revealed a sustained softening of manufacturing sector conditions, especially in the eurozone. Goods trade was muted as well, observing PMI export order indices, though the US showed signs of improvements. The latest data continued to be reflective of persistent pressures from tight financial conditions, a gradually softening economic climate and, in manufacturing, ongoing inventory reduction.

Besides PMI data, several tier-1 data will also be in focus as central bankers continue to stress data dependency. Eurozone's inflation reading will be a key release and watched for further indications of easing, though more recent HCOB Flash Eurozone PMI showed some renewal of price pressures in November. Core PCE data from the US will also be due, but any signs of softening will not come as a surprise after the lower US CPI update earlier. However, S&P Global Flash US PMI showed some reignition of services-led increase in selling price inflation in November.

In APAC, several central bank meetings take place through the week including at the Reserve Bank of New Zealand (RBNZ), Bank of Korea (BoK) and Bank of Thailand (BoT). While all three central banks are slated to stay on hold according to consensus, uncertainty on the inflation end persists for these central banks and as such, PMI figures also due out in the week will help guide the market on the latest inflation developments.

Finally, GDP readings will be due from the US, Canada, India and several eurozone economies. GDP for the quarter ending September from India will be eagerly anticipated given the outperformance observed for the Indian economy via the PMI figures.

Eurozone inflation watch

November's flash inflation figures will be due from the eurozone in the coming week. After last month's data revealed that inflation has fallen to 2.9% in the single currency bloc, the mood among economists has brightened. Amid market expectations that tightening cycles among most major developed economies have come to an end, further confirmation of easing inflationary pressures in the eurozone will be sought with the incoming official data releases.

The latest HCOB Flash Eurozone PMI data for November signalled a sustained contraction in private sector business activity as new orders declined. That said, the rate of contraction for both output and new orders eased in the latest survey period. The slight turnaround was accompanied by an intensification of price pressures, however, as output price inflation rose for the first time since January while input costs likewise increased at a faster rate.

With the PMI output price gauge leading the trend for official CPI in the economic bloc, the near-term trajectory expected for the latter continues to point lower for the time being. Some stickiness may surface around the 2.0% level in the months to come, but more importantly we will need to watch service sector inflationary pressures, as this guides core inflation. Services continued to outpace that of the goods producing sector in November according to flash PMI releases, and even ticked higher compared to October.

Key diary events

Monday 27 Nov
India Market Holiday
China (Mainland) Industrial Profits (Oct)
United States New Home Sales (Oct)
United States Building Permits (Oct, final)

Tuesday 28 Nov
Australia Retail Sales (Oct, prelim)
Thailand Trade (Oct)
Germany GfK Consumer Confidence (Dec)
Taiwan GDP (Q3, final)
United States House Price Index (Sep)
United States CB Consumer Confidence (Nov)

Wednesday 29 Nov
New Zealand RBNZ Interest Rate Decision
Thailand BoT Interest Rate Decision
Eurozone ECB Non-Monetary Policy Meeting
Spain Inflation (Nov, prelim)
United Kingdom Mortgage Lending and Approvals (Oct)
Eurozone Economic Sentiment (Nov)
Germany Inflation (Nov, prelim)
United States GDP (Q3, 2nd est.)
United States Goods Trade Balance (Oct)
United States Wholesale Inventories (Oct, adv)
United States Fed Beige Book

Thursday 30 Nov
South Korea Industrial Production (Oct)
Japan Industrial Production and Retail Sales (Oct, prelim)
Australia Building Permits (Oct, prelim)
South Korea BoK Interest Rate Decision
China (Mainland) NBS PMI (Nov)
Thailand Industrial Production (Oct)
Japan Consumer Confidence (Nov)
Japan Housing Starts (Oct)
Germany Retail Sales (Oct)
Turkey GDP (Q3)
France Inflation (Nov, prelim)
France GDP (Q3, final)
Germany Unemployment (Nov)
United Kingdom Nationwide Housing Prices (Nov)
Eurozone Inflation (Nov)
Eurozone Unemployment (Oct)
Italy Inflation (Nov, prelim)
India GDP (Q3)
Canada GDP (Q3)
United States Core PCE (Oct)
United States Personal Income and Spending (Oct)
United States Pending Home Sales (Oct)

Friday 1 Dec
Worldwide Manufacturing PMIs, incl. global PMI* (Nov)
Japan Unemployment (Oct)
South Korea Trade (Nov)
Indonesia Inflation (Nov)
France Industrial Production (Oct)
Switzerland GDP (Q3)
Italy GDP (Q3, final)
Brazil Industrial Production (Oct)
Canada Employment (Nov)
United States ISM Manufacturing PMI (Nov)

* Access press releases of indices produced by S&P Global and relevant sponsors here.

What to watch

Worldwide manufacturing PMI

Following the release of November flash PMI across major developed economies, worldwide manufacturing PMI figures will be made available at the start of the new month on Friday, December 1. Demand and employment conditions will be especially closely watched after October's PMI revealed a sustained fall in goods new orders alongside job shedding on aggregate across the globe.

Americas: US Q3 GDP (2nd est.), core PCE, ISM PMI and Canada Q3 GDP and employment data

Key releases from the US in the coming week include the second estimate of US Q3 GDP, followed by core PCE and ISM Manufacturing PMI data.

Over in Canada, Q3 GDP and employment data will be the highlights. The newly launched S&P Global Canada Services PMI revealed that subdued conditions carried through from the third quarter into October in the service sector. Overall, the composite data suggest softer Q3 conditions.

EMEA: Eurozone inflation, unemployment, economic sentiment, Germany GfK Consumer Confidence

Eurozone inflation figures will be eagerly awaited for confirmation of the softening inflation trend alluded to by PMI data thus far. That said, the latest November HCOB Flash Eurozone PMI outlined heightened cost pressures stemming from wages, while output prices also rose faster in November on the back of service sector selling price pressures. The trend here will be worth watching going into the months ahead, especially in relation to core inflation. Eurozone unemployment data will be eyed for labour market resilience.

APAC: RBNZ, BoK, BoT meetings, China PMIs and India GDP, Japan production and retail sales

In APAC, central bank meetings in New Zealand, South Korea and Thailand will unfold in the coming week with no changes expected according to consensus, though elevated inflation conditions continue to pose a challenge in some cases. Key data updates include PMI readings for November while India release GDP for the July-September quarter. Also watch out for production data in Japan.

Special reports

Flash PMIs Signal Jobs Decline as Economic Malaise Drifts into Fourth Month - Chris Williamson

Malaysian GDP Growth Improves in Third Quarter of 2023 - Rajiv Biswas

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Purchasing Managers' Index™ (PMI^®) data are compiled by S&P Global for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.

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