US Manufacturing Strength Stands AloneSeptember 02, 2014
The US ISM Manufacturing index surged to a three-year high today at 59 for August. The Markit Manufacturing PMI for the US made a 52-month high as that index rose to 57.9.
However, the Markit Global Manufacturing PMI is only moderately above the expansion level of 50. The latest reading for August was 52.6. This may help explain the recent weakness in oil prices.
Among the major economies, the United States manufacturing sector stands alone. Europe remains weak as the overall Europe PMI index is approaching the expansion/contraction line level of 50. France is particularly weak as their PMI index just made a 13-month low at 46.85. Ireland is the exception in Europe as their PMI index just reached it’s highest level since December 1999 (176-month high).
In Asia, the PMI news is more mixed. Japan has bounced after plunging in April. However, it remains well below the level it hit in January. China has been hovering around the 50 level now for three years. This has dragged down the PMIs in Australia and South Korea. Taiwan, at 56.1, is a bright spot in Asia.
The overall Emerging Markets manufacturing PMI mirrors China’s index. The PMI has been above 52 since May 2011. Brazil’s manufacturing sector is now expanding for the first time since March according to their latest PMI report. Russia and India are both mildly expanding as well.