Transcript Global Manufacturing Purchasing Managers Index

Global Manufacturing
Purchasing Manager’s Index
by
Jennifer Chemel
Ana C. Lopez
Global Manufacturing
Purchasing Managers
Index
Published by: JP Morgan
Frequency: Monthly
Period covered: Prior Month
Market Significance: Moderate
Composite and coincidental Indicator
Website:
http://www.ism.ws/files/ISMReport/JPM
organ/JPMorganMfg020107.pdf
What is it?
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A global economic indicator that provides
the first look at global business conditions
by measuring different conditions of 24
different countries
The report surveys 7,000 purchasing
managers from the selected countries
Data is shown with a base of 50; a score
higher than 50 indicates an increase in the
variable, and a score lower than 50
indicates a decrease in the variable
Countries Represented in the
Global PMI
What is in the report?
Global Report on Manufacturing
contains:
• Global Manufacturing PMI: Composite indicator
measuring overall economic conditions
• Global All-Industry Output Index: Global indicator
measuring output of the listed countries
• Global All-Industry Input Prices Index: Global
indicator measuring prices of input of the listed countries
• Global All-Industry New Orders Index: Global
indicator measuring new business for companies
• Global All-Industry Employment Index: Global
indicator measuring the general employment rate
• Input Cost Inflation: The change in the price of inputs
from one month to the next
• Jobs Growth: The amount of new jobs created
Why is it important?
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The 24 countries that the indicator
gathers information from represent
82% of global economic output
Gives an indication of economic
conditions for exports in the U.S.
Keys to Interpreting the Data
Global GDP and the JP Morgan all-industry PMI
move together
• PMI Output index and Global IP move together
•
Interpreting the data
The U.S. ISM
index and the
Global
manufacturing
PMI move
together.
Therefore the
Global PMI
further supports
the state of the
the economic
manufacturing
conditions in the
U.S.
U.S. ISM production
80
75
70
65
60
55
50
45
40
35
1998
U.S. ISM
50 no-change line
1999
2000
2001
2002
2003
2004
2005
2006
2007
Keys to Interpreting the Data
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Analyze all four indexes to get a
better read on the state of the global
economy
Data is shown with a base of 50; a
score higher than 50 indicates an
increase in the variable, and a score
lower than 50 indicates a decrease in
the variable
Latest Release

Global Report on Manufacturing
• JPMorgan Global Manufacturing PMI at
54.1, up from 52.9; 46th consecutive month of
being above 50
• Output Index at 56.0, up from 54.5
• New Orders Index at 55.5, up from 53.4
• Input Prices Index at 65.8, up from 62.8
• Employment Index at 52.9, up from 51.5
Analysis
Based on the information from this
indicator, that being:
The JP Morgan Global All-Industry Output Index
is currently at a level of 54.1, which is
consistent with a 3.0%-3.25% GDP
Because the JP Morgan PMI is a coincident
indictor and all its All indexes are increasing,
global growth is expected to expand
The expected expansion in the U.S. ISM due
increased exports puts inflationary pressures in
the U.S. economy
Any questions?