ALL: Global Manufacturing PMI

Tue Dec 01 10:00:00 CST 2015

Actual Previous
Level 51.2 51.4

November manufacturing PMI reading was 51.2, broadly unchanged from the five month high of 51.3 in October. The rate of expansion remained relatively lackluster, meaning that November continued the subdued run of data for the global manufacturing sector through 2015 so far. The respective averages for the PMI sub-indices tracking output, new orders and new export orders are all around 1.0-1.5 points below the levels achieved for 2014 as a whole.

Growth of new orders slowed from October's recent high and employee numbers continue to rise at a soft pace. The trend in production volumes improved, however, with output growth accelerating to an eight-month peak.

North America and Europe continued to register solid expansions of production in November. Growth in the US remained close to October's seven-month high, while acceleration in Mexico more than offset the continued (but slowing) downturn in Canada. Output growth in the Eurozone ticked up to its fastest in one-and-a-half years, with expansions registered in almost all of the euro area nations for which data are collected. The sole exception was Greece, which nonetheless saw the rate of contraction continue to ease sharply from the survey record pace seen in July.

With the exception of Japan where production rose at the quickest pace since March 2014, Asian economies generally reported lackluster or decreasing trends in output during November. India partly bucked this trend by recording a slight gain in production, although the rate of expansion was below those seen during its current 25-month sequence of increase. Output stagnated in China and Vietnam, and declined in Taiwan, South Korea, Indonesia and Malaysia. A marked contraction was also signaled in Brazil.

J.P. Morgan Global Manufacturing PMI gives an overview of the global manufacturing sector. It is based on 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.