Global Manufacturing PMI (Sept 2011): U.S. shines in suffering global manufacturing sector

By Prieur du Plessis, on October 5th, 2011 posted in: Economy

Growth in the global manufacturing sector is on the brink of contraction. The global manufacturing PMI that I calculate on a GDP-weighted basis for the major economic regions fell to 50.1 in September from 50.4 in August, while the JP Morgan Global Manufacturing PMI fell to 49.9 from 50.1. The U.S. ISM Manufacturing PMI masks the state of the manufacturing sector elsewhere around the globe, though. The gauge jumped to 51.6 in September, indicating acceleration in growth from a paltry 50.6 in August.

While Germany is still showing signs of growth the recession in the rest of the Eurozone’s manufacturing sector is deepening. However, it seems as if the contraction in Italy is easing somewhat, but France, the second largest economy in the Eurozone, is sliding fast. In contrast, the manufacturing sector in the U.K. has managed to grow again after contracting in August. The cold spell has spread to emerging Europe as well, with Poland leading the way as growth in its manufacturing sector is close to stalling. Turkey was the exception as its manufacturing sector is growing again.

Asian countries are also suffering. China was the major disappointment as the CFLP Manufacturing PMI only managed to rise by an abysmal 0.3 percentage points to 51.2 in a month that is normally a very strong month from a seasonal perspective. The result was that my seasonally adjusted CFLP PMI fell 2.1 percentage points to 50.1 and therefore indicates that growth in China’s manufacturing sector has stagnated. It had a severe ripple effect on the rest of Asia. Growth in India’s manufacturing sector slowed sharply, while the contraction in Taiwan, South Korea and Australia deepened.

Russia and South Africa held up reasonably well in the other BRICS countries but the contraction in Brazil’s manufacturing sector quickened.

	Manufacturing PMI		Direction	Rate of Change
Country	Sep-11	Aug-11	Direction	Rate of Change
U.S.*****	*51.6*	*50.6*	Growing	Faster
Eurozone*	*48.5*	*49.0*	Contracting	Faster
Germany*	50.3	50.9	Growing	Slower
France*	48.2	49.1	Contracting	Faster
Greece*	43.2	43.3	Contracting	Faster
Italy*	48.3	47.1	Contracting	Slower
Spain*	43.7	45.3	Contracting	Faster
Ireland*	47.3	49.7	Contracting	Faster
*U.K.**	*51.1*	*49.0*	Growing	From contracting
Japan*	*49.3*	*51.9*	Contracting	From growing
*Australia**	42.3	*43.3*	Contracting	Faster
*Emerging Economies*
Brazil*	45.5	46.0	Contracting	Faster
China**	51.2	50.9	Growing	Faster
China S/A	50.1	52.3	Growing	Slower
Czech*	52.3	53.4	Growing	Slower
Poland*	50.2	51.8	Growing	Slower
Turkey*	51.5	49.8	Growing	From contracting
India*	50.4	52.6	Growing	Slower
Russia*	50.0	49.9	Stagnating	Slower
Taiwan*	44.5	45.2	Contracting	Faster
RSA***	50.7	46.7	Growing	From contracting
S Korea	47.5	49.7	Contracting	Faster
Global****	*50.1*	*50.4*	Growing	Stagnated

Sources: Markit*; Li & Fung**; Plexus Asset Management****; ISM*****.

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Aly

October 5, 2011 at 8:35 pm

Hi Prieur – I work for a safety equipment manufacturer (gangways, loading ramps and the like) here in Texas (USA) and am always looking to keep up with the goings-on in the industry. A healthy manufacturing industry is vital to the global economy. As a manufacturer, I feel that there is so much potential, so much we could do. Hopefully, we’ll start to see the turning of the tide from our current situation.

Anyways, thanks for sharing! – Aly

Gary Seidel

October 5, 2011 at 11:53 pm

I ask clients all the time how business is going, and without a doubt, manufacturing companies are all doing “OK”. Not hiring, not adding shifts, but cautiously optimistic. Housing and construction is down, banks are a bit slow, retail could be better, but manufacturing is holding in there.