Yesterday's news indicate that the global economy is still getting stronger.
First off, the Bank of Japan's latest quarterly Tankan survey shows that Japan's economic recovery remains on track, although not as robust as some expected.
The headline diffusion index (DI) for big manufacturers in the tankan...inched up to plus 19 in September from plus 18 in June. That was below the market's consensus forecast of plus 20, and the tankan's outlook index for December of plus 18 also marked a step back... The index for big non-manufacturers was unchanged at plus 15...
The DI for small manufacturers rose to plus 3 in September from plus 2, with the December forecast DI standing at plus 4. The index for small non-manufacturers rose to minus 11 from minus 12, with the December forecast DI at minus 12...
The tankan showed large companies plan to increase capital spending by 9.3 percent in the business year to March 2006. This was below economists' forecast for a rise of 10 percent, but a projection by small companies for a 2.3 percent decline was smaller than the market's forecast for a 3.5 percent drop.
Global purchasing managers' indices were almost universally stronger in September, with the JPMorgan/NTC Global Manufacturing PMI hitting 54.7, its highest level in a year, and up from 52.2 in August.
The US ISM index hit 59.4 in September, well up from 53.6 in August. NTC reports that the RBS/NTC Eurozone Manufacturing PMI rose from 50.4 in August to 51.7 in September, the strongest monthly improvement in seven months, the CIPS/RBS UK PMI rose from 50.1 in August to 51.5 in September, the highest level since March, and the CLSA China PMI rose from 50.6 in August to 50.9 in September. And Australian manufacturing saw a sharp turnaround as the Australian Industry (Ai) Group - PricewaterhouseCoopers Australian PMI rose to 52.9 in September after hitting a low of 43.3 in August.
What is also noteworthy is that the prices sub-indices are clearly back on the rising path. The global input prices index rose from 59.7 in August to 65.6 in September, while the ISM prices index jumped from 62.5 in August to 78.0 in September.
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