Global manufacturing extended its long run of minimal contraction in December, at a PMI of 49.0 which is down 3 tenths from November. This index has held within a narrow range of 49.9 to 48.7 going back to September last year; a reading below 50 indicates month-to-month contraction in composite activity.

Details include a 48.6 level for new orders which points to more of the same (modest sub-50 scores) for the headline composite in the months ahead. Output is at 49.5 and employment at 48.7. Price readings are well tamed, at 52.4 for inputs and 51.5 for outputs which helps explain the sample's steady optimism which is well above 50, at 60.5 for future output.

The regional breakdown once again shows Russia at top with China one of the few to post above 50. The US is in the middle of the pack and below 50 with Germany and the Eurozone below 45 and near the bottom.

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.