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June 8, 2015

Global Economic Analysis and News of Note

  • The JP Morgan global Purchasing Managers’ Index (PMI) increased to 51.2 in May from 51.0 in April. JP Morgan Director of Global Economics Coordination David Henley said, “May PMI data signaled mild improvements in both the rates of expansion in global manufacturing production and new orders. Although the trend in international trade flows remains weak and a drag on the sector’s improvement, the bounces in the other indices still put us on course for a mid-year growth acceleration.”
  • The Markit PMI for the Eurozone increased to 52.2 in May from 52.0 in April as production, new orders and new export orders all rose. Readings for individual countries improved as well. Though it was still below the all-important 50-mark, France’s PMI hit a 12-month high and readings in Germany, Spain, Italy, the Netherlands and Austria all continued to indicate expansion in those countries. The Markit PMI for the United Kingdom also rose, increasing to 52.0 in May from 51.8 in April.
  • Manufacturing readings from Asia remained mixed last month. China’s PMI strengthened only slightly, rising to 49.2 in May from 48.9 in April. According to HSBC, “[S]ustained job cuts, ongoing destocking activities and reduced purchasing activity all suggest that [China’s manufacturing] sector may remain in contractionary territory as we head into mid-year.” South Korea’s PMI dropped, declining to 47.8 in May from 48.8 in April as production declined at the fastest pace since August 2013. Japan’s reading was one of the few bright spots in Asia. The Markit PMI for that country rose to 50.9 in May from 49.9 in April as both new orders and production picked up. Vietnam’s PMI reading also strengthened, but Taiwan’s remained in contractionary territory as output declined for the second month in a row.    
  • The HSBC PMI for India rose to 52.6 in May from 51.3 in April. HSBC said, “Underpinning higher output was improved demand from the domestic and foreign markets. … Growth was led by capital goods producers. Overseas demand also rose, although the rate of expansion moderated.”
  • As a reminder, all PMI readings can be found here