Analysts at ING point out that given the weakness in European and Asian indicators and the fact the dollar remains strong, it is difficult to see a sustainable improvement in export orders while there is broadening evidence that activity is decelerating domestically.
Key quotes
“There has been a truce called in the US-China trade tensions, but we see little scope for an imminent scaling back of the tariffs already enacted.”
“As such this survey, together with the non-manufacturing ISM index which will be released next week (consensus looks for a small rise to 53.6 from 52.6), still suggests that GDP growth overall will trend lower. “
“Adding to the sense of gloom for the sector, the report shows that this is the third sub-50 reading in a row with the production component dropping to its lowest level since April 2009. Orders and employment continue to contract with the one bright spot being a remarkable surge in export orders – tariff truce related? – to 50.4 from 41.0.”
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