ALL: Global Manufacturing PMI

Wed Apr 01 10:00:00 CDT 2015

Actual Previous
Level 51.8 52.0

The March global manufacturing reading was little changed from February at 51.8 indicating that the sector continued to expand at a modest, yet steady pace. The U.S. PMI rose to a five month high supported by quickening rates of expansion in both production and new orders. Solid improvements in business conditions were also highlighted for Ireland, the Czech Republic, the UK and Spain. March also saw growth accelerate in the euro area, with the Eurozone PMI climbing to a ten month high of 52.2, above the global average for the first time since April 2014. Expansions in Germany, Italy, Spain, the Netherlands and Ireland offset contractions in France, Austria and Greece.

The performance of Asian manufacturers was more subdued in March. PMI readings were below the 50.0 no-change mark in China, South Korea and Indonesia. The rates of improvement signaled by the PMI indices in Japan, Taiwan and Vietnam were weak and slower than in the prior month.

Manufacturing production increased again in March, continuing a trend observed since December 2012. Although the rate of growth only edged slightly higher, it was nonetheless the quickest pace since August of last year. Underpinning the latest increase in production were further gains in both total new business and new export orders. Manufacturing employment rose for the twentieth successive month in March. However, the rate of jobs growth remained only mild and was the weakest registered for seven months. Among the largest nations covered by the survey, staffing levels rose in the U.S., the Eurozone and the UK, but fell in China and Japan.

J.P. Morgan Global Manufacturing PMI gives an overview of the global manufacturing sector. It is based on non-opinion based monthly surveys of over 10,000 purchasing executives from 32 of the world's leading economies, including the U.S., Japan, Germany, France and China which together account for an estimated 89 percent of global manufacturing output. It reflects changes in global output, employment, new orders and prices. The Global Manufacturing 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 Economics 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 sector, 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 generally 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 Manufacturing PMI data give a detailed look at the manufacturing sector including the pace of manufacturing growth and the direction of growth for this sector. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. In addition, its sub-indexes provide a picture of output, employment, new orders and prices.