Boom Doom Economy: Global Manufacturing at Break-Even (Chart) "Conditions remain broadly stagnant"

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Global Manufacturing PMI by JPMorgan

Statement by JPMorgan At 50.0 in October, little-changed from 49.8 in September, the JPMorgan Global Manufacturing PMI remained within 0.2 points of the no-change mark for the third month running.

Commenting on the PMI David Hensley, Director of Global Economics Coordination at JPMorgan, said: ""The global manufacturing PMI edged up to the breakeven 50 mark in October. The new orders index was responsible for the increase, although it remains very depressed, whereas the coincident activity indexes of output and employment were little changed. Although US inventory conditions appear good, national surveys registered a potential excess in the growth of finished goods inventory in Asia."

Trend The Global Manufacturing PMI increased +0.2, after decreasing for 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 stagnant, at break-even reading of 50.0.

Commentary The October 2011 Global Manufacturing PMI of 50.0 has rebounded slightly from last month's 27-month low (June 2009 = 47.0) and is the first increase after 7th consecutive monthly declines. It was noted, "Conditions in the global manufacturing sector remained broadly stagnant in October. Levels of production and new orders fell slightly over the month, while new export orders declined at the quickest pace for almost two-and-a-half years". There is a small sign of a rebound, at least from contraction to break-even. Ongoing lower oil prices and an increase in business and consumer confidence is necessary to spur growth. Key points in the current report include (Direction, Rate of Change):
● Global PMI stagnation, from contracting
● Output contracting, unchanged rate

● New Orders contracting, slower rate

● Input Prices falling, change of direction

● Employment rising, slower rate

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 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 32 countries and key regions including the Eurozone. 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.