Global manufacturing production: Momentum rapidly decelerating!

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The August manufacturing PMIs came in mixed. The U.S. and China surprised on the upside while Japan disappointed with its manufacturing sector barely growing.


Manufacturing PMI
August 2010July 2010Trend
United States 56.355.5Higher, expanding
Euro zone55.156.7Lower, expanding
Germany58.261.2Robust, slowing
France55.153.9Higher, expanding
Greece43.045.3Weaker, contracting
Italy52.854.4Softer, expanding
Spain51.251.6Softer, expanding slowly
Ireland51.151.4Softer, expanding slowly
U.K.54.356.9Softer, expanding
Japan 50.152.8Weaker, barely expanding
Emerging Economies
Brazil49.551.8Moved to contraction
China51.751.2Higher, expanding slowly
Czech57.356.8Robust, improving
Poland53.852.1Higher, expanding
Turkey51.352.8Softer, expansion slowing
India57.257.6Robust, slowing
Russia52.952.7Higher, expanding
South Africa50.349.5Expanding again
Taiwan49.250.5Weaker, contracting
Global54.155.1Softer, expanding

Sources: Markit; CFLP; ISM; Plexus

The downtrend of our global GDP-weighted Manufacturing PMI for the major economies (U.S., U.K., Euro zone, Japan and China) is now firmly under way. The measure in August came in weaker at 54.1 compared to 55.1 in July, the fourth consecutive decline since the high of 57.6 in April.

Sources: ISM; Markit; CFLP; Plexus Asset Management.

Sources: ISM; Markit; CFLP, Plexus Asset Management.

The downtrend in the global weighted manufacturing PMI is indicating a rapid deceleration of global manufacturing production growth.

OECD industrial production growth in July is estimated to have slowed to 9% on a year-ago basis from a high of an estimated 10.5% in May. The GDP-weighted global manufacturing PMI suggests that industrial production growth has slowed down further in August to a pace of between 7% and 8%, with a further slowdown in September to approximately 5% to 6%.

Sources: I-Net; Plexus Asset Management; ISM; Markit.

Non-manufacturing and services PMIs due within the next few days are likely to give better insight  into where the global economy is heading.

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