Thursday, March 3, 2011

Global Manufacturing PMI at 2nd Highest All-Time! (Chart) *20th month of expansion*


Global Manufacturing PMI by JPMorgan

Global Manufacturing PMI at 2nd Highest All-Time!

Official Statement by JPMorgan February saw the global manufacturing sector continue its strong start to 2011. The JPMorgan Global Manufacturing PMI™ rose to 57.8, its joint second-highest ever reading, bettered only by May 2004's level of 57.9. Growth of output and new orders accelerated, leading to faster job creation. Inflationary pressures continued to build, however, as input prices rose at the quickest pace in two-and-a-half years.
Manufacturing Production rose for the twenty-first successive month in February, with the rate of expansion the fastest since last April. Growth in the US was the second-highest for almost seven years. The recovery in the Eurozone also gathered steam, as production rose to the greatest extent in ten-and-a-half years. Germany remained the strongest performer within the region. Signs of vigour were also exhibited in a number of the 'peripheral' nations, particularly Italy and Ireland.
New Orders February saw new orders rise at the quickest pace in almost seven years.
New Export Orders was the strongest since May last year.
* Manufacturing Employment rose to the greatest extent since the global series were first compiled in January 1998.
Input Prices surged to a two-and-a-half year high in February, mainly reflecting increased commodity, energy and oil prices.
* Commenting on the survey, David Hensley, Director of Global Economics Coordination at JPMorgan, said: "The headline PMI edged closer to its all-time record high in February, as stronger growth of output and new orders led to the steepest job creation in the series history. The latest PMI data are consistent with global IP rising by around 6-7% saar. Inflationary pressures are building, as rising commodity prices, particularly for oil and softs, drove up manufacturer's costs."
Cycle History The current JPM Manufacturing PMI of 57.8 is up +24.1 and +72% from the Great Recession cyclical bottom of 33.7 in December 2008. The current PMI is not only at a Post-Great Recession cyclical high but the 2nd highest ever recorded. The PMI is a percentage - not a total. More about the PMI below the chart.

Trend The Global Manufacturing PMI continues upwards and has increased 5 consecutive months. The current PMI has been above the slightly ascending 12-month moving average of 55.4 for 3 consecutive months and continues above the sharply ascending 24-month moving average of 52.8. (The 12-month and 24-month moving averages charts are not shown on this page).

JPM Monthly Global Manufacturing PMI (Chart) Below is a chart of the latest 27 months of the Purchasing Managers' Index (PMI) from the December 2008 Great Recession cyclical low of 33.7 through the latest month reported, February 2011. The PMI has been greater than 50, indicating global manufacturing is expanding, since August 2009, for 20 consecutive months. As can be seen, the PMI bottomed in December 2008 at 33.7, ascended significantly through August 2009 to 53.1. The PMI eventually continued upwards to a peak of 57.7 in April 2010. 5 consecutive monthly declines ensued and now 5 monthly increases.  However, the PMI still indicates global manufacturing has been expanding since August 2009.

Commentary The February 2011 Global Manufacturing PMI of 57.8 and a +0.6% increase from January is very encouraging as is this being the second highest PMI ever recorded. There have been some forecasts that predict a dip in both the USA and Global pace of recovery in Q1 2011, but this has not been the case. The USA Manufacturing PMI also increased strongly in  February and is reviewed here. The Q4 2010 (October, November, and December) data were a trend reversal to the upside from Q3 2010.

About the PMI The Global Report on Manufacturing is compiled by Markit based on the results of surveys covering over 7,500 purchasing executives in almost 30 countries. Together these countries account for an estimated 86% of global manufacturing output. 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
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 and JPMorgan*

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