Boom Doom Economy: Global Manufacturing Contracts to 27-Month Low! (Chart) *Output stagnates, trade flows decline*

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Global Manufacturing PMI by JPMorgan

Statement by JPMorgan At 49.9 in September, down from 50.2 in August, the JPMorgan Global Manufacturing PMI posted below the neutral 50.0 mark for the first time since June 2009. The performance of the global manufacturing sector has weakened noticeably since the start of the year. Over Q3 2011 as a whole, production growth was negligible and down sharply from Q1's recent peak. Incoming new work, meanwhile, contracted for the first time since Q2 2009.

Commenting on the PMI David Hensley, Director of Global Economics Coordination at JPMorgan, said: "The global manufacturing PMI dipped below the no-change mark of 50.0 for the first time since June 2009. The PMI output index has stagnated in recent months as the trend in new orders has switched into reverse gear, exacerbated by declining international trade flows. The signs point to weak growth or possible month-to-month declines in industrial production in the next few months"

Trend The Global Manufacturing PMI has decreased 7 consecutive months, from the February 2011 peak of 57.4. The short term trend, the intermediate-term trend, and the long-term trend continue downwards.

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) including the Post-Great Recession high of 57.7 in April 2010 through the latest month reported. The PMI had been greater than 50, indicating global manufacturing is expanding, from August 2009 through August 2011 (26 months). The PMI now indicates global manufacturing is slightly contracting.

Commentary The September 2011 Global Manufacturing PMI of 49.9 is a 27-month low (June 2009 = 47.0) and the 7th consecutive monthly decline. This is the first contraction since June 2009, which was the last month of the USA Great Recession. It was noted, "The signs point to weak growth or possible month-to-month declines in industrial production in the next few months". There is no sign of a rebound, or a reason for a rebound, on the horizon. Ongoing lower oil prices and an increase in business and consumer confidence is necessary to spur growth. Highlights include:
● Manufacturing Production over Q3 2011 as a whole, production growth was negligible and down sharply from Q1's recent peak.

● New Orders contracted at the fastest pace 28 months

● International Trade new export orders declined for the second successive month

● Employment increased for the twenty-second straight month

● Input Prices rose at the same pace as August's 13-month low

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 http://www.jpmorganchase.com/.

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 www.markit.com/economics.

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.