Global Manufacturing PMI Tanks!

The global manufacturing sector is contracting for the first time since July 2009. The global manufacturing PMI I calculate on a GDP-weighted basis for the major economic regions fell to 49.5 from 50.1 in September. The contraction is largely afflicted by a further significant contraction in the Eurozone.

The U.S. ISM manufacturing PMI disappointed with 50.8 in October compared to 51.6 in September. The figure was significantly lower than the consensus forecast of 52.0.

China’s CFLP manufacturing PMI fell to 50.4 from 51.2 in September but, when seasonally adjusted, the gauge rose slightly to 50.6. Japan was the star among the major economies as the manufacturing sector returned to growth in October.

The recession in the Eurozone’s manufacturing sector is gaining momentum, with Germany joining the rest. The situation in Greece and Italy has deteriorated sharply but Ireland managed to stem the tide as the manufacturing sector experienced some growth, albeit only just. In contrast to the Eurozone the manufacturing sectors in emerging European economies are improving, with Poland and Turkey at the forefront.

The manufacturing sectors of Asian countries are a mixed bag. India’s manufacturing sector is growing again after teetering on the brink of stagnation, the contraction in Australia has eased significantly and the situation in South Korea has stabilised. However, the contraction in Taiwan’s manufacturing sector has deepened.

Russia and South Africa continue to hold up reasonably well in the other BRICS countries, while the contraction in Brazil’s manufacturing sector has eased.

    Manufacturing PMI   Direction   Rate of Change Country Oct-11 Sep-11 US***** 50.8 51.6 Growing Slower Eurozone* 47.1 48.5 Contracting Faster Germany* 49.1 50.3 Contracting From growing France* 48.5 48.2 Contracting Slower Greece* 40.5 43.2 Contracting Faster Italy* 43.3 48.3 Contracting Faster Spain* 43.9 43.7 Contracting Slower Ireland* 50.1 47.3 Growing From contracting U.K.* 47.4 50.8 Contracting From growing Japan* 50.6 49.3 Growing From contracting Australia* 47.4 42.3 Contracting Slower Emerging Economies         Brazil* 46.5 45.5 Contracting Slower China** 50.4 51.2 Growing Slower China S/A 50.6 50.1 Growing Faster Czech* 51.7 52.3 Growing Slower Poland* 51.7 50.2 Growing Faster Turkey* 53.3 51.5 Growing Faster India* 52.0 50.4 Growing Faster Russia* 50.4 50.0 Growing From stagnating Taiwan* 43.7 44.5 Contracting Faster RSA*** 50.5 50.2 Growing Faster S Korea 48.0 47.5 Contracting Slower Global**** 49.5 50.1 Contracting From stagnatingSources: Markit*;Li & Fung**; Kagiso***; Plexus Asset Management****;ISM*****.

Sources: Markit*; Li & Fung**; Plexus Asset Management****; ISM*****.

Sources: Markit*; Li & Fung**; Plexus Asset Management****; ISM*****.

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