Global Manufacturing Production: Momentum Rapidly Decelerating

The August manufacturing PMIs came in mixed. The U.S. and China surprised on the upside while Japan disappointed with its manufacturing sector barely growing.

Country	Manufacturing PMI
	August 2010	July 2010	Trend
United States	56.3	55.5	Higher, expanding
Euro zone	55.1	56.7	Lower, expanding
Germany	58.2	61.2	Robust, slowing
France	55.1	53.9	Higher, expanding
Greece	43.0	45.3	Weaker, contracting
Italy	52.8	54.4	Softer, expanding
Spain	51.2	51.6	Softer, expanding slowly
Ireland	51.1	51.4	Softer, expanding slowly
U.K.	54.3	56.9	Softer, expanding
Japan	50.1	52.8	Weaker, barely expanding
Emerging Economies
Brazil	49.5	51.8	Moved to contraction
China	51.7	51.2	Higher, expanding slowly
Czech	57.3	56.8	Robust, improving
Poland	53.8	52.1	Higher, expanding
Turkey	51.3	52.8	Softer, expansion slowing
India	57.2	57.6	Robust, slowing
Russia	52.9	52.7	Higher, expanding
South Africa	50.3	49.5	Expanding again
Taiwan	49.2	50.5	Weaker, contracting
Global	54.1	55.1	Softer, expanding

Sources: Markit; CFLP; ISM; Plexus

The downtrend of our global GDP-weighted Manufacturing PMI for the major economies (U.S., U.K., Euro zone, Japan and China) is now firmly underway. The measure in August came in weaker at 54.1 compared to 55.1 in July, the fourth consecutive decline since the high of 57.6 in April.

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Sources: ISM; Markit; CFLP; Plexus Asset Management.

Sources: ISM; Markit; CFLP, Plexus Asset Management.

The downtrend in the global weighted manufacturing PMI is indicating a rapid deceleration of global manufacturing production growth.

OECD industrial production growth in July is estimated to have slowed to 9% on a year-ago basis from a high of an estimated 10.5% in May. The GDP-weighted global manufacturing PMI suggests that industrial production growth has slowed down further in August to a pace of between 7% and 8%, with a further slowdown in September to approximately 5% to 6%.

Sources: I-Net; Plexus Asset Management; ISM; Markit.

Non-manufacturing and services PMIs due within the next few days are likely to give better insight into where the global economy is heading.