Global Manufacturing Purchasing Managers Index by Jennifer Chemel Ana C. Lopez

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Global Manufacturing Purchasing Managers
IndexbyJennifer ChemelAna C. Lopez
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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/JPMorga
  n/JPMorganMfg020107.pdf

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What is it?

• 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

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Countries Represented in the Global PMI
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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

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Why is it important?

• 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.

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Keys to Interpreting the Data

• Global GDP and the JP Morgan all-industry PMI
  
• move together
• PMI Output index and Global IP move together

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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.
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Keys to Interpreting the Data

• 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

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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

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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

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Any questions?