Global PMI shows sustained manufacturing recovery

  • Business
  • Wednesday, 07 Jan 2004

LONDON: Demand for manufactured goods grew strongly around the world in December 2003, signalling a powerful recovery in the sector, according to a global indicator based on national surveys of manufacturing companies. 

The indicator, produced by JP Morgan with research and supply management organisations, rose to 58.1 last month from 56.8 in November, well above the 50 line that divides growth from contraction and its highest reading in the history compiled for the series, back to January 1998. 

The global purchasing managers’ index (PMI) combines data collected from some 7,000 executives in countries including the United States, Japan, Germany, France and Britain. 

“The global PMI points to a powerful, widespread recovery in global manufacturing,” said David Hensley, director of global economics co-ordination at JP Morgan. “A sustained surge in new orders is prompting firms to lift output, employment and inventories.” 

The employment index rose to 51.6 from 49.9, showing manufacturers are now creating more jobs than they are cutting. A strengthening labour market is a key factor in making consumers confident enough to spend, sustaining economic growth. 

The new orders and output indices also hit records for the survey history, with the new orders index rising to 64 from 62.8 and the output index going up to 62 from 60.4. 

The global index was buoyed by the US survey data released by the Institute for Supply Management last Friday, which showed US manufacturing activity growing at its fastest pace in 20 years. 

The US index rose to 66.2 from 62.8 and showed a rapid expansion in employment. A jump in the export orders index showed manufacturers gaining from the US dollar’s plunge over the past year against other major currencies, notably the euro. 

The euro zone PMI rose more modestly to 52.4 from 52.2. – Reuters  

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