ALL: Global Composite PMI

Tue Jan 06 10:00:00 CST 2015

Actual Previous
Level 52.3 53.2

December composite global PMI eased to a 14-month low in December at 52.3, down slightly from 53.1 in November. The level of the headline index has fallen in each month since hitting a near three-and-a-half year high in July.

The UK and Ireland remained at the top of the global output ranking table in December. The US continued its end of year slowdown. Although the growth rate of economic activity in the US remained above the global average, it eased for the sixth straight month to its weakest in the current 14-month sequence of expansion.

The Eurozone saw a slight acceleration in its rate of output growth, but the expansion was nonetheless the second-weakest in almost one-and-a-half years. Solid increases in economic activity in Germany, Spain and Ireland contrasted with contractions in France and Italy.

Expansions were recorded in Japan, China and India, with rates of increase ticking higher in Japan and China but easing slightly in India. Elsewhere, output contracted for the third successive month in both Russia and Brazil.

JP Morgan Global Composite PMI gives an overview of the global manufacturing and services sectors. It is based on non-opinion based monthly surveys of over 16,00 purchasing executives from 32 of the world's top economies, including the U.S., Japan, Germany, France and China which together account for over 85 percent of global GDP. It reflects changes in global output, employment, new business, backlogs and prices. The Global Composite PMI is seasonally adjusted at the national level to control for varying seasonal patterns in each country and is produced by J.P. Morgan and Markit in association with ISM and the International Federation of Purchasing and supply Management (IFPSM).

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. The J.P. Morgan Global Manufacturing PMI provides advance insight into the global manufacturing and services sectors, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of global markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The PMI data are also used by many Central Banks to help make interest rate decisions.

The J.P. Morgan Global Composite PMI data give a detailed look at the manufacturing and services sectors, how busy it is and where things are headed. Since data are pooled from many countries which represent the lion's share of global manufacturing and services output, this indicator provides an advance look at the global private sector economy. Its sub-indexes provide a picture of global output, new orders, prices, employment and backlogs.