Global manufacturing PMI tanks!

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The global manufacturing sector is contracting for the first time since July 2009. The global manufacturing PMI I calculate on a GDP-weighted basis for the major economic regions fell to 49.5 from 50.1 in September. The contraction is largely afflicted by a further significant contraction in the Eurozone.

The U.S. ISM manufacturing PMI disappointed with 50.8 in October compared to 51.6 in September. The figure was significantly lower than the consensus forecast of 52.0.

China’s CFLP manufacturing PMI fell to 50.4 from 51.2 in September but, when seasonally adjusted, the gauge rose slightly to 50.6. Japan was the star among the major economies as the manufacturing sector returned to growth in October.

The recession in the Eurozone’s manufacturing sector is gaining momentum, with Germany joining the rest. The situation in Greece and Italy has deteriorated sharply but Ireland managed to stem the tide as the manufacturing sector experienced some growth, albeit only just. In contrast to the Eurozone the manufacturing sectors in emerging European economies are improving, with Poland and Turkey at the forefront.

The manufacturing sectors of Asian countries are a mixed bag. India’s manufacturing sector is growing again after teetering on the brink of stagnation, the contraction in Australia has eased significantly and the situation in South Korea has stabilized. However, the contraction in Taiwan’s manufacturing sector has deepened.

Russia and South Africa continue to hold up reasonably well in the other BRICS countries, while the contraction in Brazil’s manufacturing sector has eased.

 

Manufacturing PMI

 

Direction

 

Rate of Change

CountryOct-11Sep-11
US*****50.851.6GrowingSlower
Eurozone*47.148.5ContractingFaster
Germany*49.150.3ContractingFrom growing
France*48.548.2ContractingSlower
Greece*40.543.2ContractingFaster
Italy*43.348.3ContractingFaster
Spain*43.943.7ContractingSlower
Ireland*50.147.3GrowingFrom contracting
U.K.*47.450.8ContractingFrom growing
Japan*50.649.3GrowingFrom contracting
Australia*47.4 42.3 ContractingSlower
Emerging Economies
Brazil*46.545.5ContractingSlower
China**50.451.2GrowingSlower
China S/A50.650.1GrowingFaster
Czech*51.752.3GrowingSlower
Poland*51.750.2GrowingFaster
Turkey*53.351.5GrowingFaster
India*52.050.4GrowingFaster
Russia*50.450.0GrowingFrom stagnating
Taiwan*43.744.5ContractingFaster
RSA***50.550.2GrowingFaster
S Korea48.047.5ContractingSlower
Global****49.5 50.1 Contracting From stagnating

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

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

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

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