Manufacturing sector continues to grow
Resource Hotspot 280
The latest manufacturing industry data has been released and it indicates there is a continued expansion occurring amongst global economies. This bodes well for the resource sector due to the strong correlations between PMI data, Industrial Production and demand for raw materials.
While the pace of recovery for the manufacturing sector is accelerating in the U.S. the data is mixed elsewhere, as illustrated in the following chart and tables:
Data sourced from Bloomberg, ISM, Markit, SR
| Headline PMI by Area |
US | Eurozone | Japan | China |
|---|---|---|---|---|
| Jan-08 | 50.7 | 52.8 | 52.3 | 53.2 |
| Feb-08 | 48.3 | 52.3 | 50.8 | 52.8 |
| Mar-08 | 48.6 | 52.0 | 49.5 | 54.4 |
| Apr-08 | 48.6 | 50.7 | 48.6 | 55.4 |
| May-08 | 49.6 | 50.6 | 47.7 | 54.7 |
| Jun-08 | 50.2 | 49.2 | 46.5 | 53.3 |
| Jul-08 | 49.5 | 47.4 | 47.0 | 53.3 |
| Aug-08 | 49.3 | 47.6 | 46.9 | 49.2 |
| Sep-08 | 43.4 | 45.0 | 44.3 | 47.7 |
| Oct-08 | 38.7 | 41.1 | 42.2 | 45.2 |
| Nov-08 | 36.6 | 35.6 | 36.7 | 38.8 |
| Dec-08 | 32.9 | 33.9 | 30.8 | 41.2 |
| Jan-09 | 35.6 | 34.4 | 29.6 | 45.3 |
| Feb-09 | 35.8 | 33.5 | 31.6 | 49.0 |
| Mar-09 | 36.3 | 33.9 | 33.8 | 52.4 |
| Apr-09 | 40.1 | 36.8 | 41.4 | 53.5 |
| May-09 | 42.8 | 40.7 | 46.6 | 53.1 |
| Jun-09 | 44.8 | 42.6 | 48.2 | 53.2 |
| Jul-09 | 48.9 | 46.2 | 50.4 | 53.3 |
| Aug-09 | 52.9 | 48.2 | 53.6 | 54.0 |
| Sep-09 | 52.6 | 49.3 | 54.5 | 54.3 |
| Oct-09 | 55.7 | 50.7 | 54.3 | 55.2 |
| Nov-09 | 53.6 | 51.2 | 52.3 | 55.2 |
| Dec-09 | 54.9 | 51.6 | 53.8 | 56.6 |
| Jan-10 | 58.4 | 52.4 | 52.5 | 55.8 |
Data sourced from Bloomberg, ISM, Markit, SR
In the U.S. the manufacturing sector has expanded for the sixth consecutive month, and the overall economy has grown for grown for the nine consecutive months.
Commenting on the data, the Institute for Supply Management™ (ISM) stated “The manufacturing sector grew for the sixth consecutive month in January as the PMI rose to 58.4 percent, its highest reading since August 2004 when it registered 58.5 percent. This month’s report provides significant assurance that the manufacturing sector is in recovery. Both the New Orders and Production Indexes are above 60 percent, indicating strong current and future performance for manufacturing. This month, 13 of 18 industries reported growth, up from nine industries last month, and this is a good indication that the impact of the recovery is expanding.”
However, data from the U.S. non-manufacturing sector provides additional clues over the recent weak equity market performance. While the overall index for January at 50.5 points was above the critical 50 point level that indicates growth, it was lower than expected. Additionally, the employment index at 44.6 remains entrenched in negative territory.
