Global manufacturing PMI expansion slows in November


J.P. Morgan has announced its Global Manufacturing PMI for November 2014. The PMI is a composite index measuring manufacturing output. It showed that global manufacturing production expanded at its slowest pace for 15 months, as growth of new orders hit a 16-month low and the trend in international trade volumes stagnated. The forward looking orders-to-inventory ratio also edged down to its weakest level since the end of 2012. Even at a 14-month low of 51.8 in November the index nonetheless signalled a further expansion of the sector.

Manufacturing production rose for the twenty-fifth successive month in November, but the rate of expansion eased to its lowest since August 2013.

North America was a key growth engine. Canada was in joint-third place of the Output PMI growth rankings, a position it shared with the Netherlands, while Mexico and the US were in fifth and sixth places respectively. This was despite the US seeing a sharp growth slowdown. The UK and Japan also reported solid expansions.

Apart from the slower US expansion, the weakness in the global manufacturing sector also mainly reflected stagnation in China and further subdued growth in the Eurozone.

The lacklustre performance of the euro area came despite it having three of the top-ranked nations (Ireland, Spain and the Netherlands), whose solid expansions were offset by weaker growth in Germany and contractions in Austria, France and Italy. Elsewhere, Brazil, Indonesia and South Korea also reported lower output.

Commenting on the survey, David Hensley, Director of Global Economics Coordination at J.P. Morgan said, “The global manufacturing PMI fell to a 14-month low in November, as growth of production and new orders moderated and international trade stagnated. The Output PMI is now consistent with growth of global IP close to 3.3% annualized, a solid pace, but not so strong as what was implied by the survey earlier in the year.”

Average input prices rose again in November, extending the current sequence of increase to one-and-a-half years. Meanwhile, average selling prices were broadly unchanged over the month.

November data also pointed to little change in stock holdings, as inventories of purchases and finished products were both broadly unchanged. The former was despite a slight increase in purchasing activity among manufacturers.

For more information on the Global Manufacturing PMI please visit the Ti Dashboard.

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