Global PMI rises to four-month high

Source: ISM

Dec 20, 2010

At 53.9 in November, up further from September's 14-month low, JPMorgan Global Manufacturing PMI rose to its highest level since July. The headline PMI has now remained above the nochange mark of 50.0 for 17 consecutive months.

Amongst the larger nations covered by the survey, PMIs rose in China (eight-month high), Germany (three-month peak), the UK (highest since September 1994), France (ten-year high) and India (six-month peak). The Japan and Brazil PMIs also increased, but, in contrast to the other nations mentioned, remained below the 50.0 no-change mark.

The US PMI signalled a robust improvement in manufacturing operating conditions, with the rate of increase only slightly below October's five-month high.

Following a further expansion in November, manufacturing production has now increased throughout the past one-and-a-half years. However, the rate of growth was slower than in October and below the average for the recovery thus far.

Emerging Asian and core European economies led the latest expansion of output, with marked rates of increase seen in China, India, France, Germany and the UK. Growth remained solid in the US, but slowed sharply to a 17-month low. The extent of the easing in the US may have partly reflected payback from October's five-month growth high. Weakness remained in the Eurozone periphery, with output falling in Spain and Greece and growth barely registering in Ireland. Japanese production also fell.

Incoming new orders rose for the seventeenth successive month in November, with growth of new work received accelerating to the sharpest since July. However, the rate of expansion remained below those seen through much of the earlier part of the recovery. China, India, the Eurozone and the UK all saw substantial growth in new orders and accelerated rates of increase. Growth in the US eased slightly and was below the average for the current period of increase.

Total new orders fell sharply in Japan, reflecting weaker domestic demand and a second successive monthly decline in new export orders. However, measured overall, global manufacturing new export business rose for the seventeenth consecutive month.

The ongoing recovery led to further job creation in November. Amongst the major industrial regions covered by the survey, growth of employment was seen in the US, the Eurozone (centred on Germany, France, the Netherlands and Austria) and the UK. Staffing levels were little changed in China and India, while Japan saw a modest decline for the fourth month running.

Cost pressures picked up sharply in November, as purchase price inflation accelerated to a six-month peak. Costs rose sharply in China, which saw a near series record increase.