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Global All-Industry Output Index Dips -0.7%
Global All-Industry Output Index at 6 Month Low, Expanding at Slower Rate
Official Statement The JPMorgan statement about the August 2010 Global All-Industry Output Index: "At 53.9 in August, the JPMorgan Global All-Industry Output Index signalled that world economic activity had expanded for the thirteenth successive month. However, the rate of increase eased further from April's 34-month high to its weakest since February."
The JPMorgan Global All-Industry Output Index (Global Manufacturing & Services PMI) decreased -0.7% to 53.9 in August. This was the fourth consecutive monthly decrease since the April 2010 peak of 57.7. The August -0.7% decrease followed the three previous declines of -0.8%, -1.6%, and -0.7% in July, June, and May, respectively.
David Hensley, Director of Global Economics Coordination at JPMorgan, said: "August PMI data pointed to a further downshift in the rate of recovery of the global economy. Growth of global GDP is likely to slow to around 2.5% in the third quarter, down from a peak of almost 4% in the second quarter. However, what we are seeing is more in line with a moderation than a sharp slowdown, suggesting that there is still sufficient momentum heading forward to maintain the recovery."
Cycle History The data on the chart below is limited to the latest 13 months ending August 2010. The August Global All-Industry Output Index is down -3.8 and -6.6% from the intermediate-term peak of 57.7 in April 2010. The current Index is up +2.2 and +4.3% from the intermediate-term bottom of 51.7 in November 2009. Therefore, the current August 2010 Global All-Industry Output Index is near mid-range from the recent top and bottom, somewhat closer to the bottom.
Trend The August Global All-Industry Output Index of 53.9 has now just barely dropped below the 12-month moving average of 54.4. Since the peak in April 2010, each month has been lower now for 4 consecutive months (May through August). However, any value over 50 indicates expansion so the growth continues at a slower pace.
Chart (Global All-Industry Output Index) Below is a chart of the latest 13 months of the Global All-Industry Output Index from August 2009 through the latest month reported, August 2010. The Index has been greater than 50, indicating global services are expanding, since August 2009 - 13 consecutive months. The Index peaked in April 2010 at 57.7. Four consecutive monthly declines have ensued through this latest August 2010 decline. However, the four consecutive monthly declines still indicate global output is expanding, just at a slower rate.
About The Global Manufacturing & Services PMI (Global All-Industry Output Index)
The JPMorgan Global All-Industry Output Index (Global Manufacturing & Services PMI) decreased -0.7% to 53.9 in August. This was the fourth consecutive monthly decrease since the April 2010 peak of 57.7. The August -0.7% decrease followed the three previous declines of -0.8%, -1.6%, and -0.7% in July, June, and May, respectively.
David Hensley, Director of Global Economics Coordination at JPMorgan, said: "August PMI data pointed to a further downshift in the rate of recovery of the global economy. Growth of global GDP is likely to slow to around 2.5% in the third quarter, down from a peak of almost 4% in the second quarter. However, what we are seeing is more in line with a moderation than a sharp slowdown, suggesting that there is still sufficient momentum heading forward to maintain the recovery."
Cycle History The data on the chart below is limited to the latest 13 months ending August 2010. The August Global All-Industry Output Index is down -3.8 and -6.6% from the intermediate-term peak of 57.7 in April 2010. The current Index is up +2.2 and +4.3% from the intermediate-term bottom of 51.7 in November 2009. Therefore, the current August 2010 Global All-Industry Output Index is near mid-range from the recent top and bottom, somewhat closer to the bottom.
Trend The August Global All-Industry Output Index of 53.9 has now just barely dropped below the 12-month moving average of 54.4. Since the peak in April 2010, each month has been lower now for 4 consecutive months (May through August). However, any value over 50 indicates expansion so the growth continues at a slower pace.
Chart (Global All-Industry Output Index) Below is a chart of the latest 13 months of the Global All-Industry Output Index from August 2009 through the latest month reported, August 2010. The Index has been greater than 50, indicating global services are expanding, since August 2009 - 13 consecutive months. The Index peaked in April 2010 at 57.7. Four consecutive monthly declines have ensued through this latest August 2010 decline. However, the four consecutive monthly declines still indicate global output is expanding, just at a slower rate.
About The Global Manufacturing & Services PMI (Global All-Industry Output Index)
The Global Report on Manufacturing & Services is compiled by Markit based on the results of surveys covering over 11,000 purchasing executives in almost 30 countries. Together these countries account for an estimated 84% of global GDP. Questions are asked about real events and are not opinion based. Data are presented in the form of diffusion indices, where an index reading above 50.0 indicates an increase in the variable since the previous month and below 50.0 a decrease. Data are presented in the form of diffusion indices, where an index reading above 50.0 indicates an increase in the variable since the previous month and below 50.0 a decrease. 50.0 = no change level.
Data sources: Country % share of global GDP
United States 28.8
Japan 12.8
China 6.5United States 28.8
Japan 12.8
Germany 5.2
United Kingdom 4.3
France 3.8
Italy 2.9
Brazil 2.1
India 2.0
South Korea 1.9
Spain 1.8
Mexico 1.7
Australia 1.3
Netherlands 1.1
Russia 1.1
Turkey 1.0
Taiwan 0.8
Switzerland 0.7
Poland 0.6
Austria 0.6
South Africa 0.5
Denmark 0.4
Greece 0.4
Israel 0.4
Ireland 0.3
Singapore 0.3
Czech Republic 0.2
New Zealand 0.2
Hungary 0.2
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*Data courtesy of the Institute for Supply Management and JPMorgan*
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