ALL: Global Composite PMI

Mon Nov 06 10:00:00 CST 2017

Actual Previous
Level 54.0 54.0

The global economy continued to make solid and steady progress in October. The composite global PMI reading edged up to 54.0 from the previous 53.9. Similar rates of output expansion were noted for the manufacturing and service sectors. Activity improved in all six categories. However, output growth in the consumer sectors (consumer goods and services) was weaker than in the other industries (intermediate goods, investment goods, business services and financial services).

Although the rate of expansion in the Eurozone eased slightly, it was still one of the best registered over the past six-and-a half years. Growth accelerated in France, but eased in Germany, Italy, Spain and Ireland. Rates of increase picked up in the US, Japan, the UK and India, but slowed in China and Russia. Growth held steady in Australia. Brazil slipped back into contraction, as a decrease in service sector activity more than offset a solid increase in manufacturing output.

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.