ALL: Global Composite PMI

Thu May 04 10:00:00 CDT 2017

Actual Previous
Level 53.7 53.8

April composite PMI indicated that growth was maintained at a solid clip at the start of the second quarter. Stronger expansions in key developed nations such as the US, the euro area and the UK, offset weaker growth in Japan and in larger emerging markets like China, India and Russia. Brazil also returned to expansion, ending a 25-month sequence of decline. The April reading was 53.7, unchanged from March.

Output was up for both manufacturers and service providers, with rates of growth broadly similar in each sector. In services, this represented a steadying of the pace of expansion following a mild acceleration in March. For manufacturing production the upturn was the weakest in three months. The six sub-sectors covered by the survey (consumer, intermediate and investment goods as well as business, consumer and financial services) all registered growth, with the spread between the respective output index readings the narrowest since sub-sector data were first compiled in October 2009.

JP Morgan Global Composite PMI gives an overview of the global manufacturing and services sectors. It is based on 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.