Global Manufacturing PMI notes small decline

The JP Morgan Global Manufacturing PMI (Purchasing Managers Index) registered 51.2 in November 2015, a decrease of 0.1 points compared to the previous month.

Manufacturing PMI measures the level of output of a country’s manufacturing sector, based on a number of factors including: production, new orders and employment. An index value of above 50 indicates an expansion in the manufacturing sector, while an index value of below 50 indicates a contraction in the sector.

The global index has now remained above the neutral 50 mark for 36 consecutive months. However, the rate of expansion was described as “relatively lacklustre”, with November continuing a run of subdued figures for global manufacturing, which has been the overarching story of 2015.

In the US, the ISM’s PMI figure was 48.6 in November – down 1.5 points over a month earlier. The implication is that economic activity in the manufacturing sector contracted for the first time in 36 months.

With an index score of 48.6 recorded in November 2015, Caixin’s China Manufacturing PMI improved by 0.3 points compared to the previous month. Operating conditions in China’s manufacturing sector have now deteriorated for nine consecutive months, although the latest contraction was the weakest since June.

The Markit/BME index for Germany remained above the neutral 50 mark in November, registering a score of 52.9, up by 0.8 points month–on–month. Business conditions in Germany’s manufacturing sector have improved for 12 months in a row.

Turning to Brazil, its manufacturing PMI registered an 80-month low of 43.8 in November. A Markit press release stated, “Weaker underlying demand led firms to lower output at a sharp pace. The latest data also highlight a renewed decline in new export business and the fastest contraction in payroll numbers in over six-and-a-half years. Meanwhile, the weak real continued to add to firms’ cost burdens and factory gate charges were raised again.”

*Note: From October 2012 data for the JP Morgan Global Manufacturing PMI uses a different dataset to historical figures.