Global Economic Analysis and News of Note: Manufacturing Sector Continues To Struggle Worldwide
- The JP Morgan global purchasing managers index (PMI) rose to 50.9 in January from 50.7 in December as new orders and output prices strengthened. The bank’s Director of Global Economic Coordination David Hensley said, “The January PMI data signal that the upturn in global manufacturing remained lackluster at the start of 2016. A mild improvement in new order growth and higher employment are steps in the right direction, but with export trade flows still close to stagnation the trend in output has yet to break free of its ongoing inertia.”
- Driven by a drop in new orders and output, the Markit PMI for the Eurozone fell to 52.3 in January from 53.2 in December. Reports for the Eurozone’s two biggest economies were also weak: Germany’s index declined to a three-month low while France’s hit a five-month low. Markit’s reading for the United Kingdom, however, rose to 52.9 in January from 52.1 in December as production rose again in January.
- Manufacturing readings in Asian countries were mixed last month. The Caixin PMI for China increased to 48.4 in January from 48.2 in December despite the fact that total new business was at its weakest level in seven months and production continue to weaken. Japan’s PMI fell to 52.3 in January from 52.6 in December as new order growth slowed. The Nikkei reading for India increased to 51.1 in January from 49.1 in December as production and new orders recovered from December's flood-related contractions. Nikkei’s reading for South Korea fell to 49.5 in January from 50.7 in December and new orders and production slowed and the employment reading fell to its lowest level in six months. Nikkei’s Taiwan index also fell while its reading for Vietnam increased slightly.
- As a reminder, all PMI reports can be found here.