December 2010 Manufacturing PMIs: Expansion Accelerating!
The manufacturing PMIs for December indicate that the rate of expansion in the global manufacturing sector is accelerating. Only France, India, China, Greece and Australia reported weaker growth. The manufacturing sectors in most countries except Australia, Japan and Greece continue to expand.
In the Eurozone the manufacturing sectors in France and Germany continue to be robust while Ireland, Italy and Spain surprised on the upside. The manufacturing sector in the U.K. accelerated to a very buoyant 58.3.
In Asia Japan's PMI improved slightly but the manufacturing sector remains in the grip of a recession. The acceleration in the tigers in Asia - China and India - has moderated somewhat while growth in Taiwan is accelerating. Emerging Europe continues be robust.
| Country | Manufacturing PMI | Trend | |
| Dec-10 | Nov-10 | ||
| US***** | 57.0 | 56.6 | Expansion accelerated, robust |
| Eurozone* | 57.1 | 55.3 | Expansion accelerated, robust |
| Germany* | 60.7 | 58.1 | Expansion accelerated, robust |
| France* | 57.2 | 57.9 | Softened a tad, robust expansion |
| Greece* | 43.1 | 43.9 | Contraction intensified |
| Italy* | 54.7 | 52.0 | Expansion accelerated |
| Spain* | 51.5 | 50.0 | Expanding again |
| Ireland* | 52.2 | 51.2 | Expansion accelerated |
| U.K.* | 58.3 | 58.0 | Expansion accelerated, robust |
| Japan* | 48.3 | 47.3 | Contracting at lower rate |
| Australia* | 46.3 | 47.6 | Contraction intensified |
| Emerging Economies | |||
| Brazil* | 52.4 | 49.9 | Expanding again |
| China** | 53.9 | 55.2 | Expansion softened |
| Czech* | 58.4 | 57.3 | Expansion accelerated, robust |
| Poland* | 56.3 | 55.9 | Expansion accelerated, robust |
| Turkey* | 56.4 | 56.4 | Robust |
| India* | 56.7 | 58.4 | Softened a tad, robust expansion |
| Russia* | 53.5 | 51.1 | Expansion accelerated |
| Taiwan* | 54.7 | 51.7 | Expansion accelerated |
| Global**** | 54.9 | 54.0 | Expansion accelerated |
Sources: Markit*;Li & Fung**; Plexus Asset Management****;ISM*****
It is apparent that the global manufacturing PMI has bottomed and an upward trend is likely to be maintained in coming months.
Sources: Markit; Li & Fung; Plexus Asset Management; ISM.
Growth in global industrial production on a year-ago basis is likely to gain momentum in the first quarter of this year.
Sources: Markit*;Li & Fung**; Plexus Asset Management****;ISM*****; I-Net
Bridge.
Industrial metal prices will continue to be strongly supported by the acceleration of the global manufacturing sector.
Sources: Markit*;Li & Fung**; Plexus Asset Management****;ISM*****; I-Net
Bridge.
The numbers surprised me on the upside and made me feel a tad less sceptical regarding the outlook for the global economy. But I continue to fret about how things will pan out in China given the stricter monetary policies of the PBoC and the potential contagion of the debt crisis in the Eurozone.
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Author: Prieur du Plessis
Dr Prieur du Plessis
investmentpostcards.com
With 25 years' experience in investment research and portfolio management, Dr Prieur du Plessis is one of the most experienced and well-known investment professionals in South Africa. More than 1 000 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns. He also published a book, Financial Basics: Investment, in 2002.
He holds the following degrees: BSc (Quantity Surveying) (Cape Town), HonsB (B & A) (cum laude) (Stellenbosch), MBA (cum laude) (Stellenbosch); and DBA (Doctor of Financial Management) (Stellenbosch).
Prieur is chairman of the Plexus group of companies, which he founded in 1995. Previously he was general manager: portfolio management at Sanlam, responsible for the management of investment portfolios with total assets in excess of $5 billion.
Plexus is a pioneer in the mutual fund industry and has achieved a number of firsts under Prieur's leadership. These include the authoritative Plexus Survey, a quarterly analysis of the consistency of the performance of unit trust management companies, the Plexus Offshore Survey, the Plexus Unit Trust Indices, and the PlexCrown Fund Ratings.
Plexus is the South African partner of John Mauldin, American author of the most widely distributed investment newsletter in the world, and also has an exclusive licensing agreement with California-based Research Affiliates for managing and distributing its enhanced Fundamental Index™ methodology in the Pan-African area.
In 2001 Prieur received the Santam/AHI Business Leader of the Year award for corporate leadership, business acumen and entrepreneurial flair. He was also profiled in the book South Africa's Leading Managers (2006). Plexus received the AHI/Old Mutual Enterprise of the Year award in 1997 and was also included in the book South Africa's Most Promising Companies (2005).
Prieur is 52 years old and lives with his wife, TV producer and presenter Isabel Verwey, and two children in Welgemoed, Cape Town. His recreational activities include long-distance running, motor cycling and reading. He belongs to the Cape Town Club, Johannesburg Country Club, Gordon's Bay Yacht Club and Swiss Social & Sports Club.
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