Emerging Europe factories surprise in March, buck trend
By Michael Winfrey
PRAGUE (Reuters) - Emerging Europe's manufacturing sector showed a surprising surge in March, bucking a trend of decline in the euro zone and defying expectations that a slowdown in the car- and electronics- producing region would accelerate.
A crucial part of the European supply chain, Poland, the Czech Republic and Hungary are handcuffed to global demand, declines in which have caused policymakers to slash growth forecasts and look for ways to shore up budget revenues.
But Purchasing Managers Index (PMI) data showed all three had shrugged off PMI falls in Germany and the wider euro zone.
Hungary's PMI expanded at the fastest rate in 13 months to 56.8, from a revised 51.2 in February, the Association of Logistics, Purchasing and Inventory Management said.
Czech and Polish PMI, compiled under different methodology by Markit Economics, showed slighter but still unexpected rises above the 50-point mark separating expansion from contraction.
The Czech figure hit a six-month high of 52.1, from 50.5 in February, as gains in output and new orders confounded a Reuters poll that predicted a slide to 49.5.
Poland's manufacturing index ticked higher to 50.1 points, from 50 in February, confounding a forecast of 49.65.
"Hungary and the Czech Republic are surprises that do not fit in to the picture of the other published data," said David Marek, chief economist at Prague-based Patria Finance. Continued...