Manufacturing PMI down in US and Japan but up in Europe and China

US manufacturing may be slowing, as Reuters reports:

An index of national factory activity, released by the Institute for Supply Management, fell to 53.8 in June from 54.4 in May, falling short of economists' forecasts for a rise to 55. A reading above 50 indicates growth in the factory sector.

But the data is ambiguous.

The prices paid index fell to 76.5 in June from 77.0 May, while new orders, an indicator of future growth, rose to 57.9 in June from 53.7 in May.

The employment number in the report dipped to 48.7 from 52.9 in May, the first time it had been below 50 since October 2003.

Among other indicators released yesterday, construction spending fell 0.4 percent in May while auto sales, especially by US automakers, fell in June.

In Japan, the tankan survey showed Japanese firms getting more optimistic.

The headline diffusion index (DI) for big manufacturers' sentiment was plus 21, higher than a reading of plus 20 in March... The September index was seen at plus 22, showing firms expect conditions to improve over the next three months. The tankan...also showed big firms expect their capital spending to rise 11.6 percent in the year ending next March...

Ironically, Japan was the other major economy that saw its PMI deteriorate in June.

	May	June	Change
US	54.4	53.8	-
Eurozone	57.0	57.7	+
Japan	55.3	54.3	-
UK	53.5	55.1	+
China	52.8	52.9	+

The net result was that global PMI was unchanged in June from May.

	May	June	Change
Global PMI	55.0	55.0	=
Output	57.6	56.8	-
New Orders	56.3	57.3	+
Input Prices	71.8	71.9	+
Employment	52.3	51.5	-

The good news from the global report is that the new orders sub-index was up. The bad news is that the input prices sub-index was also up. Looks like demand is meeting supply constraints. Again from the global PMI report:

At 44.4 in June, the Global Manufacturing Suppliers' Delivery Times Index signalled a further marked decline in average vendor performance. The sharpest lengthenings of lead-times were generally recorded in the Eurozone, although the US, Japan and China also reported delays in the receipt of purchases from suppliers.