The acceleration in global economic activity since the lows in October gained traction in December.
The JP Morgan Global Composite Index improved to 53.0 from 52.0 in November after falling to 51.4 in October. While the improvement in the composite PMI could virtually be attributed entirely to a significant improvement in business conditions in the U.S., the improvement in December was more broad based. The U.S. continues to lead the way, though, as my GDP-weighted Composite ISM PMI taking into account the Non-manufacturing Business Activity Index (the basis Markit uses to calculate the composite PMIs) instead of the PMI itself improved further to 55.7 from 55.4 in November. The manufacturing sector experienced accelerated growth increasing to 53.2 from 52.7. The ISM Business Activity Index remained unchanged at a relatively robust 56.2.
China, Brazil and India contributed significantly to the acceleration in global economic activity. China reversed the unseasonal slump in November in both the manufacturing and non-manufacturing sectors while Indian industries accelerated to near robust levels.
The contraction in the Eurozone’s private sector eased markedly for the second consecutive month. My calculated GDP-weighted PMI for the Eurozone rose to 48.3 from 47.2 in November and 46.6 in October. After stagnating in November, growth in Germany’s services sector is accelerating again while the services sector in France has stopped contracting. Elsewhere in the Eurozone the situation is dire to say the least, with the services sector in Ireland joining the contraction in the other debt-ridden Eurozone countries. However, the contraction in the Eurozone’s manufacturing sector, including France and Germany, continues. The acceleration in growth in the U.K.’s services sector from near stagnation in November is noteworthy.
The situation in Australia’ manufacturing and services sectors has stabilized while Japan is showing signs of acceleration in growth. The contraction in Hong Kong and Taiwan eased somewhat but the contraction in South Korea’s manufacturing sector deepened. In the Middle East, Saudi Arabia’s economy remains robust but growth in the Emirate states is faltering.
| GDP-weighted/ Composite PMI | Direction |
Rate of change
|
||
| Country | Dec-11 | Nov-11 | ||
| U.S.*** | 52.9 | 52.2 | Growing | Faster |
| U.S. BAI***(note 1) | 55.7 | 55.4 | Growing | Faster |
| Eurozone**** | 48.3 | 47.2 | Contracting | Slower |
| Germany* | 51.3 | 49.4 | Growing | From contracting |
| France* | 50.0 | 48.8 | Stagnated | From contracting |
| U.K.**** | 52.8 | 50.8 | Growing | Faster |
| Japan* | 50.1 | 48.9 | Stagnated | From contracting |
| Emerging Economies | ||||
| China** | 52.6 | 49.3 | Growing | From contracting |
| China S/A** | 52.4 | 49.5 | Growing | From contracting |
| Brazil* | 53.2 | 51.5 | Growing | Faster |
| India* | 54.7 | 52.3 | Growing | Faster |
| Russia* | 53.5 | 54.6 | Growing | Slower |
| Hong Kong* | 49.7 | 48.7 | Contracting | Slower |
| UAE* | 51.7 | 52.5 | Growing | Slower |
| Saudi Arabia* | 57.7 | 58.1 | Growing | Slower |
| JP Morgan Global Composite* | 53.0
|
52.0
|
Growing | Faster
|
Note: ISM Non-manufacturing Business Activity Index used instead of Non-manufacturing PMI.
Sources: *Markit; **CFLP, Li & Fung, Plexus Asset Management; ***ISM, Plexus Asset Management; ****Markit, Plexus Asset Management.
| Non-manufacturing/
Services PMI |
Direction | Rate of Change | ||
| Country | Dec-11 | Nov-11 | ||
| U.S.** | 52.6 | 52.0 | Growing | Faster |
| U.S. BAI*** | 56.2 | 56.2 | Growing | Steady, robust |
| Eurozone | 48.8 | 47.5 | Contracting | Slower |
| Germany | 52.4 | 50.3 | Growing | Faster |
| France | 50.3 | 49.6 | Growing | From contracting |
| Italy | 44.5 | 45.8 | Contracting | Faster |
| Spain | 42.1 | 36.8 | Contracting | Slower |
| Ireland | 48.4 | 52.7 | Contracting | From growing |
| U.K. | 54.0 | 52.1 | Growing | Faster |
| Japan | 50.4 | 49.5 | Growing | From contracting |
| Australia | 49.0 | 47.7 | Contracting | Slower |
| Emerging Economies | ||||
| Brazil | 54.8 | 52.6 | Growing | Faster |
| China* | 56.0 | 49.7 | Growing | From contracting |
| China S/A* | 55.3 | 51.4 | Growing | Faster |
| India | 54.2 | 53.2 | Growing | Faster |
| Russia | 53.8 | 54.8 | Growing | Slower |
| JP Morgan Global Services | 53.2 | 52.6 | Growing | Faster |
Sources: Markit; CFLP*; ISM**; US Business Activity Index***; Plexus Asset Management.
| Manufacturing PMI |
Direction |
Rate of Change |
||
| Country | Dec-11 | Nov-11 | ||
| U.S.***** | 53.2 | 52.7 | Growing | Faster |
| Eurozone* | 46.9 | 46.4 | Contracting | Slower |
| Germany* | 48.4 | 47.9 | Contracting | Slower |
| France* | 48.9 | 47.3 | Contracting | Slower |
| Greece* | 42.0 | 40.9 | Contracting | Slightly slower |
| Italy* | 44.3 | 44.0 | Contracting | Slight slower |
| Spain* | 43.7 | 43.8 | Contracting | Slightly faster |
| Ireland* | 48.6 | 48.5 | Contracting | Slightly slower |
| U.K.* | 49.6 | 47.6 | Contracting | Slower |
| Japan* | 50.2 | 49.1 | Growing | From contracting |
| Australia* | 50.2 | 47.8 | Growing | From contracting |
| Emerging Economies | ||||
| Brazil* | 49.1 | 48.7 | Contracting | Slower |
| China** | 50.3 | 49.0 | Growing | From contracting |
| China S/A | 50.5 | 48.3 | Growing | From contracting |
| Czech* | 49.2 | 48.6 | Contracting | Slower |
| Poland* | 48.8 | 49.5 | Contracting | Faster |
| Turkey* | 52.0 | 52.3 | Growing | Slightly slower |
| India* | 54.2 | 51.0 | Growing | Faster |
| Russia* | 51.6 | 52.6 | Growing | Slower |
| Taiwan* | 47.1 | 43.9 | Contracting | Slower |
| S Korea | 46.6 | 47.1 | Contracting | Faster |
| Global**** | 50.4 | 49.6 | Growing | From contracting |
Sources: Markit*; Li & Fung**; Kagiso***; Plexus Asset Management****; ISM*****.
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