Manufacturing Around the World as Depicted by October Purchasing Manager Surveys

November 2, 2019

The soft data provided by various and sundry purchasing manager surveys reported each month provide an early sign of economic conditions whose signals may or may not be confirmed by subsequent hard data. Although manufacturing covers a comparatively small piece of total activity, the other parts are dependent upon the health of manufacturing such that the latter commands a disproportionately high degree of investors’ attention. When the diffusion indices of purchasing manager surveys exceed the 50 level, conditions are perceived to have improved compared to the prior month, and the higher the index lies above 50, the more quickly conditions are improving. So supposing a PMI rose from 53.5 in September to 54.7 in October, one infers that conditions improved in the later month and the rate of improvement quickened. The converse conclusions should be drawn for readings below 50 or that decrease from one month to the next. Readings of 50.0 imply neither improvement nor deterioration.

More sub-50 PMI scores were experienced in October than readings above the 50 threshold. Economies experiencing a sub-50 PMI in manufacturing last month include Japan, Euroland, the United States, Germany, Indonesia, Malaysia, South Korea, Taiwan, Switzerland, Sweden, Russia, Turkey, Czech Republic, South Africa, Great Britain, and Austria. Ones with a manufacturing PMI score above 50 in October were Canada, China, Australia, France, Ireland, India, Greece, Norway, the Netherlands, Brazil, Canada, and Mexico. Australia, Vietnam, and Thailand posted scores of 50.

Lower PMI’s in October than September were reported for the Netherlands (a 76-month low), Indonesia (47 month), Vietnam (46), India (24), Thailand (13),, Sweden (8-month low), Greece (4), Australia (4), and Taiwan (2). Higher PMI readings were touched in China (32-month high), Canada (8), Mexico (8), Switzerland (7), Ireland (6), Malaysia (6), U.K. (6), Norway (5), Czech Republic (4), France (4), South Africa (3), Brazil (3), Austria (2-month high), Germany (2), Russia (2), and South Korea (2). A preliminary estimate of Euroland’s October PMI had the same value as the final estimate from September.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.


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