Thursday, March 3, 2011

Global Economic Output Highest Since April 2006! (Chart) *February marks 19th month of expansion*


Global All-Industry Output Index by JPMorgan

Global All-Industry Output Highest Since April 2006!

Official Statement by JPMorgan February saw the global economy expand at the fastest pace since April 2006. The JPMorgan Global All-Industry Output Index rose to 59.4, up from 58.3 in January, to signal growth for the nineteenth consecutive month. Strong expansions in output were seen in both the manufacturing and service sectors. This further suggested that the focus of the recovery has broadened from being primarily on manufacturers to more fully encompass service providers. Manufacturing production rose for the twenty-first month in a row, and to the greatest extent since last April. Service sector business activity expanded at the quickest rate in almost five years.
* National data pointed to a broad-based expansion, with growth recorded in almost all of the manufacturing and service sector surveys for which February data were available. Growth in the US was the strongest since January 2004's series record high.
* The rate of expansion in the Eurozone picked up to its fastest for over four-and-a-half years, led by Germany and France. There were also signs of improvement in the 'periphery' of Italy, Spain and Ireland. The recovery in the UK remained heavily skewed towards manufacturing. Growth was marked in India, eased sharply in China and was modest in Japan.
* Commenting on the survey, David Hensley, Director of Global Economics Coordination at JPMorgan, said: "The global economic recovery strengthened in February, and remained broad-based across manufacturing and services. Marked new order growth and increasing employment should also aid with sustaining the gains already made. Cost inflation remains a concern, however, especially with oil and other commodities continuing to rise in price."
Cycle History The current Global All-Industry Output Index of 59.4 is at not only a Post-Great Recession peak but also a Pre-Great Recession peak and 58 month high. The current Index  is up +7.7 and +15% from the intermediate-term bottom of 51.7 in November 2009. The All-Industry Output Index is a percentage - not a total. More about the Index below the chart.

Trend The overall trend has been upwards and is now at a Pre-Great Recession peak. The Global All-Industry Output Index of 59.4 is above the ascending 12-month moving average of 56.0 for 3 consecutive months. Since the peak in April 2010 (57.7), there have been 6 decreases in the last 10 months. The increases have been large and enough to put the Index over the top and at a 58 month high. However, any value over 50 indicates expansion, so the growth had continued at a slower pace and the Index has remained above 50 for 19 consecutive months. (The 12-month moving average chart is not shown on this page).

Chart (Global All-Industry Output Index) Below is a chart of the latest 19 months of the Global All-Industry Output Index from August 2009 through the latest month reported, February 2011. The Index has been greater than 50, indicating global output is expanding, since August 2009, for 19 consecutive months. The Index peaked in April 2010 at 57.7, which was a 34-month high and now the February 2011 Index of 59.4 has exceeded this previous peak. Five consecutive monthly declines ensued until the October acceleration, November dip, and now December, January, and February increases.

Commentary The February 2011 increase of the Global All-Industry Output Index (+1.1%) to a strong 59.4 was enough to set a 58 month high and continue the now 19 consecutive months of expansion. Both the the Global Manufacturing PMI and Global Services PMI were reviewed in previous posts as are the USA Manufacturing PMI and Non-Manufacturing PMI.

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 83% 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 sources: Country % share of global GDP
United States 28.6
Japan 12.3
China 7.4
Germany 5.0
United Kingdom 4.2
France 3.7
Italy 2.8
Brazil 2.2
India 2.2
South Korea 1.9
Spain 1.8
Australia 1.4
Netherlands 1.1
Russia 1.0
Turkey 0.9
Taiwan 0.8
Switzerland 0.7
Poland 0.6
Hong Kong 0.6
Austria 0.5
South Africa 0.5
Denmark 0.4
Greece 0.4
Israel 0.4
Singapore 0.4
Ireland 0.3
Czech Republic 0.2
New Zealand 0.2
Hungary 0.1

J.P. Morgan Chase & Co. is a leading global financial services firm with assets of $803 billion and operations in more than 50 countries. The firm is a leader in investment banking, financial services for consumers and businesses, financial transaction processing, investment management, private banking and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase is headquartered in New York and serves more than 30 million consumer customers nationwide, and many of the world’s most prominent corporate, institutional and government clients. Information about JPMorgan Chase is available on the internet at

Markit Economics is a specialist compiler of business surveys and economic indices, including the Purchasing Managers’ Index™ (PMI™) series, which is now available for 26 countries and key regions including the Eurozone and BRIC. The PMIs have become the most closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more go to

Founded in 1915, the Institute for Supply Management™ (ISM) is the largest supply management organization in the world as well as one of the most respected. ISM's mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education. ISM's membership base includes approximately 40,000 supply management professionals with a network of domestic and international affiliated associations. ISM is a not-for-profit institute that provides opportunities for the promotion of the profession and the expansion of professional skills and knowledge.

The International Federation of Purchasing and Supply Management (IFPSM) is the union of 42 national purchasing associations worldwide. Within this circle, about 200,000 purchasing professionals can be reached. IFPSM is a non-political, independent and non-profit oriented international organisation, registered in Aarau, Switzerland. IFPSM facilitates the development and distribution of knowledge to elevate and advance the procurement profession, thus favourably impacting the standard of living of citizens worldwide through improved business practices.

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*Data courtesy of the Institute for Supply Management & JPMorgan*

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