Look Ahead: Global manufacturing is recovering, but where?

Manufacturers in some of the world’s largest economies are steaming ahead as changing political landscapes reshape the global trade network. Data scheduled for release this week will show whether the jubilation continues for German factory owners and whether the US will push through a slowdown. In the UK, a weakening pound amid Brexit negotiations may feed a rally for domestic manufacturers. Canadian industry, meanwhile, may once again reduce the country’s trade deficit, despite new US tariffs.

Monday: Purchasing Managers’ Manufacturing Index (PMI) data for June will give a comprehensive look at the global private manufacturing sector. Monday’s release includes India, the euro zone, and the United States, among many others.

In India, observers will watch whether the surging optimism of May will translate to a sixth month of manufacturing expansion. In the US, preliminary data put PMI for June at a nine-month low, but it still showed improving conditions. Early euro-zone data showed manufacturing near a six-year high on rising consumer confidence and factory jobs growth. Taken together, the data should give a hint as to whether manufacturers are troubled or enticed by the evolving global trade scenario.

Wednesday: The US government’s M3 survey on factory shipments, inventories, and orders is expected. An advance report showed durable goods orders decreased for a second consecutive month after seasonal adjustments, with respective drops of 0.9% in April and 1.1% in May. Decreased orders for aircraft made up much of the May plunge, while orders for automobiles and industrial machinery rose, the Associated Press reported. Investors will try to discern whether the recent slowdown is a blip amid 18 months of manufacturing optimism, or if it’s reason for concern. Another data point released on Wednesday: the earnings report for office furniture maker Herman Miller, which could be an indicator of economic growth in the regions it serves.

Thursday: The release of statistics on manufacturing orders in Germany will show the state of industry amid the EU’s tumult. The seasonally adjusted index has trended upward this year, though foreign orders dipped sharply in April. German business confidence is at its highest since 1991, and many domestic investors believe that the primary threats to the economy come from abroad. US President Donald Trump recently promised to change his country’s trade deficit with Germany. One sign of capital appetite might come from Tuesday’s earnings report from Adinotec AG, a German maker of road construction technology.

Statistics Canada, meanwhile, will report on Canada’s international trade. Last month’s release showed Canada narrowing its trade deficit with higher exports of automobiles, energy products, and forestry products. Exports to the US were particularly high in April, rising 5.4% to $36.1 billion, MarketPulse reported. New US tariffs on Canadian lumber may change the equation for a major part of that exchange.

Friday: New data could show the early effects of Brexit negotiations on manufacturing. The UK Office for National Statistics will publish a measure of production for manufacturing, mining, and energy for the month of May. A snapshot from the business group CBI indicates that demand for British manufacturing is at its highest in nearly 30 years, thanks to a recovering global economy and the fact that the pound has weakened since the Brexit vote, boosting foreign buyers’ interest. The earnings report released Thursday for popular fashion company SuperGroup will show how one global brand is faring.

Sunday: Investors interested in Japan will look for hints of direction with the release of machinery orders data for May. The figure took a sharp drop of about 3.1% (seasonally adjusted) in April, but that followed three months of growth. The government recently raised its economic assessment, saying that the economy was on a gradual recovery path, but preliminary PMI data put manufacturing at its weakest growth in seven months. The release of an earnings report for Osaka Organic Chemicals Industry on Thursday may provide another indication.