Sunday, July 3, 2011

Global Manufacturing Growth at 23-Month Low (Chart) *24th month of expansion*


Global Manufacturing PMI by JPMorgan

Official Statement by JPMorgan The JPMorgan Global Manufacturing PMI fell to 52.3 in June, down from 53.0 in May and well below February's near-series record high. The latest reading was the weakest since July 2009, the first month of the current two-year period of recovery. Highlights include:
● Manufacturing Production increased for the twenty-fifth consecutive month in June, although the rate of expansion was the weakest since June 2009 (the first month of that period of sustained expansion).
● New Orders The slowdown in output growth mainly reflected a softening trend in new order inflows.
● International Trade volumes increased at the slowest pace of the current two-year run of expansion.
Employment/Job Creation rose in the global manufacturing sector for the nineteenth month in a row during June.
● Input Prices June saw a further marked easing in the rate of input price inflation, in part reflecting recent falls in the cost of a number of commodities.

Trend The short term trend continues downwards with 4 consecutive monthly decreases and a 23-month low in June. The intermediate-term trend (6 months) has been downwards for 2 consecutive months. The long-term trend (12 months) has been downwards for 3 consecutive months.

Cycle History The JPMorgan Manufacturing PMI reached a Post-Great Recession peak of 57.7 in April 2010. A Great Recession cyclical bottom of 33.7 was set in December 2008. The PMI is a percentage - not a total. More about the PMI below the chart.

JPMorgan Monthly Global Manufacturing PMI (Chart) Below is a chart of the Purchasing Managers' Index (PMI) from the cyclical low, the Great Recession low of 33.7 in December 2008 through the latest month reported. The PMI has been greater than 50, indicating global manufacturing is expanding, since August 2009. 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. The PMI still indicates global manufacturing has been expanding since August 2009.

Commentary The June 2011 Global Manufacturing PMI of 52.3 is a 23-month low (July 2009 = 50.0) and the 4th consecutive monthly decline in expansion. In June, the decrease was "Among the major industrial regions, PMIs signalled slower rates of expansion in the Eurozone, Japan, China and the UK. The US PMI ticked slightly higher from May's 20-month low, but remained well below the highs reached earlier in the year." In May, much of the contraction is attributable to a "marked slowdown" in USA manufacturing. Much of the March and April 2011 contractions were attributed to the earthquake in Japan plus higher oil and commodity prices. The USA Manufacturing PMI increased in June and is reviewed here [USA Manufacturing Growth Increases in June (Chart) *Sector expands for 23rd month*].

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.

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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