Global Purchasing Manager Indices (outdated)

August 2013 Update

Emerging markets: Years of strong increases in wages combined with tapering fears have taken their toll resulting in higher costs and lower availability of investment capital. EM Companies have issues in coping with developed economies. Some of them even need to shed jobs.

state of the world cotd

European recovery continues while most Emerging Markets struggle and US slows


The following graph shows the average PMIs for the different geographical areas. The picture clearly shows that the speed of the U.S. recovery has slowed, while Europe and China are catching up now. Emerging Markets have been hit most by rising wages, with countries like Indonesia, India and Brazil still having issues. The slowing of the US manufacturing growth was visible in the relatively weak Markit manufacturing index of 53.1, while the ISM index still expanded.

Purchasing Manager Indices August 2013

Click on graph to expand


JP Morgan’s global PMIs vs. different risk indicators

Services are an important part of the economy, which are not contained in the manufacturing PMIs above. JP Morgan’s global PMIs show the combined global manufacturing PMIs, services PMIs and a composite of manufacturing and services.
After the strong improvements in the manufacturing PMIs in 2010 and 2011, potentially fuelled by quantitative easing, it is now the turn for the services PMIs to outpace the manufacturing PMIs.
We see parallels between current PMI readings and the ones of February 2011. Similarly to February 2011, the world economy is set for strong growth. In 2011, however, this was stopped by the Libyan war, the outbreak of the euro crisis and high inflation figures and deteriorating consumer sentiment in the U.S.

(Click for details on the links inside the table)
MonthManu factur.ServicesCom positeMichigan Consumer ConfidenceS&P 500CopperBrent OilAUD/ USDReference date
August 201351.756.155.282.116453304115.700.9053Sep 3, 2013
July50.854.954.185.117033168108.930.8903August 2, 2013
July 3, 2013
June 3, 2013
May 3, 2013
December 201250.254.853.774.514613700111.421.0481Jan 5, 2013
November49.754.953.782.714073656110.921.0432Dec 3
October49.252.151.382.614233557105.751.0338Nov 3
September48.954.052.578.314373775108.071.0231Oct 3
August48.152.351.174.314063485108.071.0239Sep 3
July48.452.751.772.3136133071061.0465Aug 2
June48.950.650.373.213573466971.0230Jul 2
May50.652.552.179.312633289980.9640Jun 3
April 201251.452.052.376.4140237821161.0260May 2, 2012
September 201149.952.652.055.7112331321020.9634Sep 2, 2011
February 201157.859.357.077.5133144981151.0127Mar 2, 2011


Longer time overview


China and other emerging markets came far more quickly out of the 2008/2009 recession. In 2009 and 2010, the Fed fueled the Chinese, Brazilian and other emerging markets’ recoveries and housing bubbles with cheap money. The Chinese government helped with a huge investment program. Due to the depressed housing market, the US could not recover that quickly.

In 2010/2011, Germany and the Euro zone followed the Chinese expansion thanks to strong German exports. In 2011, rising gas and falling home prices caused the United States to slow down.

The explosion of the euro crisis and the following austerity radically stopped European expansion in the second half of 2011. European PMIs fell from 57 to 47 in a couple of months. The United States was not impressed by the euro crisis at all, but thanks to cheaper gas prices and the flow back of funds into the US, they recovered at the end of 2011. From April 2012 onwards, all global economies were weakening. This tendency could be stopped by liquidity injections from global central banks in September 2012 and was followed by seasonal improvements until February 2013.


Global PMIs December 3, 2012

Global PMIs December 3, 2012 - Click to enlarge


For an overview of the euro zone PMIs see this page.

Next page: Which indicators are the leading ones?

George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.
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