Global Economic Analysis and News of Note
- The J.P. Morgan global purchasing managers’ index (PMI) remained unchanged at 51.0 between June to July. Senior Economist James Lupton said, “The headline index has tracked at a below long-run trend level in recent months as positive growth contributions from North America, Japan and Western Europe have been offset by the ongoing softness across Asia, Russia and Brazil manufacturing sectors. The lackluster trend in new orders suggests the soft growth patch may continue in the coming months.”
- Manufacturing readings from various Asian nations were overall very weak in July. The Caixin PMI for China fell to 47.8 last month from 49.4 in June. The report said, “Renewed falls in both total new work and new export orders led manufacturers to cut production at the fastest rate since November 2011” and “softer client demand and reduced output requirements contributed to further job shedding and lower purchasing activity, with the latter declining at the sharpest rate since January 2012.” Readings from other Asian nations also remained week: the South Korean index was at its second-lowest level since August 2013 and Taiwan’s index remained below the 50-mark as production and new orders fell significantly. Vietnam’s index did improve, rising to 52.6 in July from 52.2 in June, as did Japan’s, which increased to 51.2 in July from 50.1 as production and new orders strengthened.
- The manufacturing sector in Europe was largely unchanged in July. Markit’s eurozone PMI fell slightly, to 52.4 in July from 52.5 in June. Greece’s manufacturing index hit an all-time low, but the sectors in the eurozone’s largest economies, Germany and France, also fell. Despite the nearly flat headline reading, Markit Chief Economist Chris Williamson said, “The eurozone manufacturing economy showed encouraging resilience in the face of the Greek debt crisis in July.” Meanwhile, Markit’s PMI for the United Kingdom increased to 51.9 in July from 51.4 in July as production and employment strengthened.
- The Nikkei PMI for India rose to 52.7 in July from 51.3 in June. New orders, production and the number of new export orders all improved last month.
- As a reminder, all PMI reports can be found here.