Global manufacturing holds steady at end of 2012

World economies are clearly not synchronized but it is nice to see that the U.S. and China are helping global manufacturing stabilize at the end of 2012.

The global manufacturing sector continued to stabilise in December. At 50.2, from 49.6 in November, the JPMorgan Global Manufacturing PMI™ – a composite index* produced by JPMorgan and Markit in association with ISM and IFPSM – lifted back above the no-change mark of 50.0 for the first time since May 2012.

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Global manufacturing output, new orders and employment were all broadly unchanged over the month in December. PMI indices tracking trends in each of these variables also rose further from lows seen during mid-2012.

Among the largest industrial nations covered by the survey, solid gains in output were recorded in the US, China and the UK. Emerging markets also fared well, with expansions continuing in Mexico, India, Brazil, Turkey and Indonesia. Although growth in Russia and Vietnam slowed to near stagnation, trends in output stabilised in South Korea and Taiwan following six-month periods of contraction.

The Eurozone and Japan remained the main drags on global manufacturing production and employment in December. The euro area saw output contract for the tenth month running, while jobs were cut for the eleventh straight month. The downturn in Japan gathered pace, with production falling at the sharpest pace since early-2011 and payroll numbers declining for the third consecutive month.

Employment rose in the US, Canada, Mexico, India, Taiwan, Turkey, Ireland and Vietnam, and was broadly unchanged in China, the UK, South Korea and Brazil.

Global manufacturing new export orders declined for the ninth successive month in December. However, the rate of contraction eased to its weakest since May 2012. December data signalled that manufacturers maintained a preference for leaner inventory holdings, with stocks of
purchases and finished products both declining further during the latest survey period.

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