September 9, 2019

PMI Readings Indicate Major Anxiety About Manufacturing Economy


  • The J.P. Morgan global purchasing managers’ index (PMI) rose to 49.5 in August, up slightly from July’s 81-month low of 49.3. It was the fourth month in a row that the reading had been below 50 – its longest sequence in contraction territory since 2012. The bank said new order intakes fell at the joint-fastest pace in nearly seven years, business optimism dropped to a series-record low, international trade flows weakened and the cyclically sensitive orders-to-inventory ratio hit its joint-lowest level since late-2012.
  • The IHS Markit reading for the Eurozone rose slightly from July to August, from 46.5 to 47.0. The report said, “The downturn in the manufacturing sector remained centered on the intermediate and investment goods categories during August, with notable contractions recorded across both sectors. In contrast, consumer goods continued to buck the wider trend, expanding at a solid rate and extending the current period of growth to nearly six years.” The IHS Markit reading for the United Kingdom fell to 47.4 in August, its lowest level in 85 months, as new orders contract at fastest pace in over seven years and business confidence fell to a record low.
  • In Asia, the Caixin reading for China rose slightly, from 49.9 in July to 50.4 in August, due to the fastest increase in production in five months. Japan’s PMI, meanwhile, remained under 50 last month as output continued to decline and business confidence remained low. South Korea’s index improved to 47.3 in July to 49.0 in August. India’s reading fell to a 15-month low due to due to slower increases in sales, output and employment. Operating conditions in the ASEAN countries – Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam deteriorated at fastest pace since November 2015.
  • As a reminder, all PMI readings can be found here.