ALL: Global Manufacturing PMI

Fri Dec 01 10:00:00 CST 2017

Actual Previous
Level 54.0 53.5

November global manufacturing sector strengthened to a reading of 54.0, up from 53.5 in October. All subindexes including output, new orders, new exports, employment and input and output prices rose at a faster rate in the month. The rates of expansion in output, new orders and employment all hit multi-year highs. Price pressures remained elevated, however, with input costs and output charges rising at accelerated and above long run average rates. Business conditions improved across the consumer, Intermediate and investment goods sectors. The strongest expansion was at intermediate goods producers and the slowest in the consumer goods category.

Growth remained sharper (on average) in developed nations compared to emerging markets. The euro area where its PMI climbed to a near-record high. Rates of increase also strengthened in Japan (44-month high), the UK (51-month high), Australia (8-month high) and Canada (2-month high). Growth slowed slightly in the US, but remained solid overall.

In the main emerging nations, growth eased to a five month low in China, but accelerated in India (fastest in over a year), Brazil (81-month high) and Russia. Mexico returned to expansion after contracting in October.

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.