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October 5, 2015

Global Economic Analysis and News of Note

  • The JP Morgan global purchasing managers’ index (PMI) fell to 50.6 in September from 50.7 in August. The report said, “The U.S. and the European Union (EU) remained positive contributors to global manufacturing growth” while “the Asia region remained one of the weaker points in the global manufacturing sector during September.”
  • The Markit PMI for the Eurozone fell to 52.0 in September from 52.3 in August as input and output prices both fell. Despite the slight decline, however, Markit said, “The Eurozone manufacturing sector continued to make steady progress at the end of the third quarter, as production and new business both expanded at modest rates.” Additionally, France’s manufacturing sector grew in September, leaving Greece’s sector as the only one in the Eurozone in contraction territory. Meanwhile, the Markit PMI for the United Kingdom fell to 51.5 in September from 51.6 in August as the industry lost jobs for the first time since August 2013.
  • Manufacturing readings for Asia were mixed in September. China’s PMI fell just 0.1 percentage point, to 47.2 last month from 47.3 in August, but the report from Caixin was extremely negative. It said the reading indicated “the quickest deterioration in operating conditions faced by Chinese manufacturers since March 2009” and noted “total new work fell at the quickest rate in over three years, partly driven by a steeper fall in new export business.” It concluded that “companies cut output at the sharpest rate in six-and-a-half years, while staff numbers fell at the quickest pace since the start of 2009” and “reduced production schedules also prompted firms to lower their purchasing activity again in September, while disappointing sales led to the strongest increase in stocks of finished goods for over three years.” Nikkei’s index for Japan fell to 51.0 from 51.7 as exports declined for the first time in 15 months and purchasing activity decreased at quickest rate since April 2014. Meanwhile, South Korea’s index remained below the all-important 50 mark that separates expansion from contraction, but both output and new orders decline at softer rates. Taiwan’s PMI rose slightly last month while Vietnam’s PMI fell to 49.5 in September from 51.3 in August.
  • As a reminder, all PMI readings from around the word can be found here