Friday, 2 June 2006

Global manufacturing expansion passed its peak?

The latest JPMorgan global report on manufacturing says that the global manufacturing expansion "passed its peak in May, as growth of output and new orders slowed and cost inflationary pressure mounted".

 AprilMayChange
Global PMI55.955.0-
Output58.457.5-
New Orders57.656.3-
Input Prices66.371.8+
Employment53.452.3-

National PMIs for the major economies were as follows:

 AprilMayChange
US57.354.4-
Eurozone56.757.0+
Japan55.555.3-
UK54.053.2-
China52.752.8+

There were other economic data coming out of the US yesterday. The summary from Reuters:

U.S. factory expansion eased in May to the slowest pace since August while April pending home sales slipped for the third straight month, reports showed on Thursday, indicating the red hot pace of economic growth at the start of the year may be cooling.

The housing and manufacturing reports combined with separate data released earlier showing a lower-than-expected increase in labor costs amid solid productivity gains suggest rising price pressures remain well contained.

2 comments:

ChinaLawBlog said...

Isn't one month too little to constitute a trend?

lim said...

I had the same question, hence the question mark in the title.

But the global PMI does seem at least to be past a short-term peak, and the trends in the major sub-indices -- especially the new orders index, which fell for the third consecutive month -- do seem consistent with such an inference.

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