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Monday, January 4, 2010

Purchasing Managers Worldwide: Manufacturing Blossoming

Global factory activity continues to accelerate. According to business managers worldwide, manufacturing vivification is now at the highest rate in nearly four years and new orders growth is now at a rate not seen in more that five and a half years.

The global PMI index is produced by JP Morgan with input from research and supply management organizations around the world. The firm's report on its PMI was released on Monday and combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia.

"December PMI data indicate that the global manufacturing sector approaches 2010 on a positive footing," said David Hensley of JP Morgan.

The global employment index has also moved into positive territory for the first time since March 2008, indicating net job growth on a global scale.

Earlier on Monday additional data showed Chinese manufacturing activity expanded at the fastest rate on record in December.

Also on Monday, the Institute for Supply Management said the U.S. manufacturing sector grew for a fifth month in December, with the index hitting its highest level since April 2006. If the ISM's PMI for December is annualized, it corresponds to a 4.6% increase in US GDP annually.

Perhaps the best news in the ISM report is new orders level which -- despite a run of very strong gains in prior months -- jumped again. The new order strength points to continued rising activity in the US manufacturing sector in the months ahead.

Production continues to show strong monthly gains and firms now report adding to their workforces again.

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