ALL: Global Composite PMI

Tue Dec 05 10:00:00 CST 2017

Actual Previous
Level 54.0 54.0

November global composite PMI reading was 54.0, unchanged from October to remain at its highest over the past two-and-a half years. The outlook also remained positive, with new business rising at the strongest pace since September 2014 and backlogs of work increasing to the greatest extent in four years. The rate of expansion was solid and slightly above its long-run average. The rate of increase in manufacturing production climbed to the greatest extent since February 2011. Service sector business activity also rose at a solid clip, albeit the weakest in four months.

Growth at service providers was again led by the financial and business categories, while increases in manufacturing output were strongest in the intermediate and investment goods sectors. The consumer category was the weakest performer in both the services and manufacturing industries.

Output across the Eurozone expanded at the quickest pace in over six-and-a-half years, with accelerations seen across each of the currency union's 'big-four' economies. Rates of expansion also improved in China, Russia and Australia, but slowed in the US, Japan, the UK and India. Brazil was the only major nation to signal a contraction.

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.