Global PMI Scorecard: Not a pretty picture
After faltering in October, growth in global economic activity accelerated again in November. The global manufacturing sector remains in recession territory, while growth in the services sector inched ahead after dropping in October.
The JP Morgan Global Composite Index improved to 52.0 after falling to 51.4 in October. The improvement in the composite PMI can virtually be entirely attributed to a significant improvement in business conditions in the U.S. My GDP-weighted Composite ISM PMI, taking into account the Non-manufacturing Business Activity Index (the basis Markit uses to calculate the composite PMIs) instead of the PMI itself, showed a major improvement to 55.4 from 53.1 in October. The manufacturing and non-manufacturing sectors both experienced accelerated growth.
My calculated GDP-weighted PMI for the Eurozone improved slightly to 47.2 from 46.6 in October as the deepening recession in the manufacturing sector was outweighed by an easing of the contraction in the services sector of the economy. France was a major contributor as a result of a significant easing of the contraction in France’s composite PMI from 45.6 to 48.8 in November. Germany moved from stagnation to contraction, though, while the U.K. managed to eke out slightly faster growth.
In contrast, business conditions in the other major economic regions weakened significantly. Both Japan and China took a turn for the worse in November. Growth in Japan’s services sector ended abruptly, while the manufacturing sector is contracting again. Significant weakness has crept into both economic sectors of China. Business conditions in Hong Kong have worsened again. Conditions in the major emerging economies turned for the better, though. Growth in India is accelerating again after stagnating in October, while growth in Russia is accelerating. Economic activity in Brazil also improved slightly.
Note: ISM Non-manufacturing Business Activity Index used instead of Non-manufacturing PMI.
Sources: *Markit; **CFLP, Li & Fung, Plexus Asset Management; ***ISM, Plexus; ****Markit, Plexus Asset Management.
Sources: Markit; CFLP*; ISM**; US Business Activity Index***; Plexus Asset Management.
Sources: Markit*; Li & Fung**; Kagiso***; Plexus Asset Management****; ISM*****.
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