BackPMI indicates start of recovery this quarter
PMI indicates start of recovery this quarter
Premium
In fact, the composite index of manufacturing and services, known as the JPMorgan Global All-Industry Output Index, showed a rise in its input price sub-index, from 46 in May to 49.6 in June. There was no such rise in input prices in the global manufacturing PMI, however, which indicates that there’s still plenty of spare capacity in manufacturing worldwide.
Also Read Budget brings deficit for oil and gas investors
Nevertheless, manufacturing output continued to rise in China, India, Denmark and Turkey, while there was a return to expansion in the manufacturing sector in the US, Japan the UK and Brazil. The net result: the Global Output Index stood at 50.4 in June, indicating expansion from the previous month. David Hensley, director of Global Economics Co-Ordination at JPMorgan, has also said that “the new orders to inventory ratio is still rising, suggesting that the ongoing recovery is getting traction".
The upshot of the improvement in both the manufacturing and services indices was an increase in the All-Industry Output Index to 48.1, from 44 in May. While that shows the world economy continued to contract in June, it’s also very near stability. If the trend holds, the global economy should start recovering in the current quarter.
The employment data, however, continued to be very negative, with the combined services and manufacturing employment index at 44.1 in June. Employment losses were higher in manufacturing than in services.
Write to us at marktomarket@livemint.com
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
