ALL: Global Manufacturing PMI

Thu Mar 01 10:00:00 CST 2018

Actual Previous
Level 54.2 54.4

February global manufacturing PMI was down for a second month this time to 54.2 still one of the best readings since early-2011. February data indicated that the upturn remained broad based. Expansion was evident across the consumer, intermediate and investment goods sectors, and also in almost all of the nations covered by the survey. The exception was a slight contraction in Malaysia.

Most of the larger industrial nations saw slight growth decelerations in February, including the US, the euro area, Japan and the UK. Although the easing was marginally greater in the Eurozone, it remained the strongest performing region overall. China, Brazil, Australia and Vietnam all saw their rates of growth improve, while Indonesia returned to expansion following contractions in the prior two months.

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.