Global Economic Analysis and News of Note: How Do U.S., Canadian Manufacturing Sectors Compare To The Rest Of The World?
- The JP Morgan Global Manufacturing purchasing managers’ index (PMI) rose to 54.5 in December, a near-seven year high. Readings for output, new orders, and employment all improved. David Hensley, JP Morgan Director of Global Economic Coordination, said, “Improved inflows of new business, rising backlogs of work and improved business optimism all point to this robust upswing in output growth being carried over into 2018.”
- While Europe’s manufacturing sector was the strongest at the end of 2017, the U.S. and Canadian manufacturing industries were healthy and growing. The IHS Markit reading for the United States increased to 55.1 in December from 53.9 in November. Driven by “steep increases” in new work, output expanded at quickest pace in 11 months in the United States and the rate of job creation was at its fastest since September 2014. The Institute for Supply Management’s (ISM) PMI for the United States also improved, increasing to 59.7 last month from 58.2 in November. ISM said that, of the 18 manufacturing industries, 16 reported growth last month. The primary metals industry showed the sixth-strongest growth rate of the 16 while the fabricated metal products industry expanded at the 15th-best rate.
- The IHS Markit reading for Canada also improved, to 54.7 in December from 54.4 in November, due to an increase in new orders that was driven by domestic and foreign demand.
- Manufacturing readings from Asia were mixed in December. Caixin’s index for China improved. Caixin’s report explained, “Latest data highlighted faster growth of output, total new work and export sales. Greater production led to a further rise in buying activity, with the rate of growth quickening to a four-month high.” Taiwan’s PMI was at an 80-month high in December while Nikkei’s index for Japan improved last month due to an increase in new orders. Business confidence was at a 13-month low among Japanese manufacturers, however. South Korea’s PMI improved despite the fact that new order growth was at a five-month low. Nikkei’s ASEAN index fell below the 50-point mark in December, indicating the manufacturing sectors in smaller Asian countries (Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) are slowing. Nikkei’s index for India improved, meanwhile. The report for that country said Indian “operating conditions improve[ed] at the strongest rate in five years.”
- The Eurozone IHS Markit PMI rose to 60.6 in December from 60.1 in November. Readings were at or close to record levels in Germany, Netherlands, Austria, and Ireland and business optimism on the continent was at a record high. The IHS Markit PMI for the United Kingdom, meanwhile, fell to 56.3 in December from 58.2 in November even though output, new orders, and employment all increased at solid rates.
- Mexico’s PMI fell to 51.7 in December from 52.4 in November. The country continued to see a rise in new orders, but the pace slowed at the end of the year.
- As a reminder, PMI readings for other nations can be found here.
- In other news: American Metal Market (subscription required) reported that Chinese crude steel output fell in December while The Associated Press reported in Britain fell 5.7 percent in 2017 to 2.54 million vehicles sold. Though the sales number was the third highest on record, it was the largest decline since the 2009 recession. The Associated Press said sales “are set to fall further this year largely because of subdued economic growth.”