Global PMI Scorecard: A turn for the better led by the U.S. and China

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The acceleration in global economic activity since the lows in October gained traction in December.

The JP Morgan Global Composite Index improved to 53.0 from 52.0 in November after falling to 51.4 in October. While the improvement in the composite PMI could virtually be attributed entirely to a significant improvement in business conditions in the U.S., the improvement in December was more broad based. The U.S. continues to lead the way, though, as 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 improved further to 55.7 from 55.4 in November. The manufacturing sector experienced accelerated growth increasing to 53.2 from 52.7. The ISM Business Activity Index remained unchanged at a relatively robust 56.2.

China, Brazil and India contributed significantly to the acceleration in global economic activity. China reversed the unseasonal slump in November in both the manufacturing and non-manufacturing sectors while Indian industries accelerated to near robust levels.

The contraction in the Eurozone’s private sector eased markedly for the second consecutive month. My calculated GDP-weighted PMI for the Eurozone rose to 48.3 from 47.2 in November and 46.6 in October. After stagnating in November, growth in Germany’s services sector is accelerating again while the services sector in France has stopped contracting. Elsewhere in the Eurozone the situation is dire to say the least, with the services sector in Ireland joining the contraction in the other debt-ridden Eurozone countries. However, the contraction in the Eurozone’s manufacturing sector, including France and Germany, continues. The acceleration in growth in the U.K.’s services sector from near stagnation in November is noteworthy.

The situation in Australia’ manufacturing and services sectors has stabilized while Japan is showing signs of acceleration in growth. The contraction in Hong Kong and Taiwan eased somewhat but the contraction in South Korea’s manufacturing sector deepened. In the Middle East, Saudi Arabia’s economy remains robust but growth in the Emirate states is faltering.

GDP-weighted/ Composite PMIDirection 

 

Rate of change

CountryDec-11Nov-11
U.S.***52.952.2GrowingFaster
U.S. BAI***(note 1) 55.755.4GrowingFaster
Eurozone****48.347.2ContractingSlower
Germany*51.349.4GrowingFrom contracting
France*50.048.8StagnatedFrom contracting
U.K.****52.850.8GrowingFaster
Japan*50.148.9StagnatedFrom contracting
Emerging Economies
China**52.649.3GrowingFrom contracting
China S/A**52.449.5GrowingFrom contracting
Brazil*53.251.5GrowingFaster
India*54.752.3GrowingFaster
Russia*53.554.6GrowingSlower
Hong Kong*49.748.7ContractingSlower
UAE*51.752.5GrowingSlower
Saudi Arabia*57.758.1GrowingSlower
JP Morgan Global Composite*  

53.0

 

52.0

 

Growing

 

Faster

Note: ISM Non-manufacturing Business Activity Index used instead of Non-manufacturing PMI.

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

 

Non-manufacturing/

Services PMI

 

Direction

 

Rate of Change

CountryDec-11Nov-11
U.S.**52.652.0GrowingFaster
U.S. BAI***56.256.2GrowingSteady, robust
Eurozone48.847.5ContractingSlower
Germany52.450.3GrowingFaster
France50.349.6GrowingFrom contracting
Italy44.545.8ContractingFaster
Spain42.136.8ContractingSlower
Ireland48.452.7ContractingFrom growing
U.K.54.052.1GrowingFaster
Japan50.449.5GrowingFrom contracting
Australia49.0 47.7ContractingSlower
Emerging Economies
Brazil54.852.6GrowingFaster
China*56.049.7GrowingFrom contracting
China S/A*55.351.4GrowingFaster
India54.253.2GrowingFaster
Russia53.854.8GrowingSlower
JP Morgan Global Services  

53.2

 

52.6

 

Growing

 

Faster

Sources: Markit; CFLP*; ISM**; US Business Activity Index***; Plexus Asset Management.

 

Manufacturing PMI

 

Direction

 

Rate of Change

CountryDec-11Nov-11
U.S.*****53.252.7GrowingFaster
Eurozone*46.946.4ContractingSlower
Germany*48.447.9ContractingSlower
France*48.947.3ContractingSlower
Greece*42.040.9ContractingSlightly slower
Italy*44.344.0ContractingSlight slower
Spain*43.743.8ContractingSlightly faster
Ireland*48.648.5ContractingSlightly slower
U.K.*49.647.6ContractingSlower
Japan*50.249.1GrowingFrom contracting
Australia*50.2 47.8 GrowingFrom contracting
Emerging Economies
Brazil*49.148.7ContractingSlower
China**50.349.0GrowingFrom contracting
China S/A50.548.3GrowingFrom contracting
Czech*49.248.6ContractingSlower
Poland*48.849.5ContractingFaster
Turkey*52.052.3GrowingSlightly slower
India*54.251.0GrowingFaster
Russia*51.652.6GrowingSlower
Taiwan*47.143.9ContractingSlower
S Korea46.647.1ContractingFaster
Global****50.449.6GrowingFrom contracting

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

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