ALL: Global Manufacturing PMI

Tue Apr 03 10:00:00 CDT 2018

Actual Previous
Level 53.4 54.2

March global manufacturing PMI eased to a five month low to 53.4, down from 54.1 in February and its lowest reading since October 2017. Companies reported slower output growth for the major components including new orders, new exports, employment and both input and output prices. The average level in the first quarter of 2018 as a whole was unchanged at 54.0 from the last quarter of 2017.

March data indicated slower rates of expansion in both the consumer and intermediate goods sectors, with growth at three- and seven-month lows respectively. The Investment Goods PMI rose to its highest level in the year-so-far.

National PMI data showed expansions in almost all of the nations covered, with only South Korea, Malaysia and Thailand contracting. Growth slowed in the euro area, China, Japan, India and Australia, but improved in the US, the UK, Brazil and Russia.

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.