You undoubtedly saw the latest print of the Purchasing Managers Index (PMI) from the Institute of Supply Management. The latest survey results were strong across the board, as the PMI jumped on strong results from new orders and production. This was while customer inventories (a more leading index) fell and exports tracked higher. You can find the full report with all the details here.
ISM August 2013 report
What you did not hear was that global PMI does not reflect the strength in the US. In fact, global manufacturing excluding the US remains flat at best. The following chart shows the US PMI versus the global PMI, excluding the US.
The disparities between manufacturing activity in the US and globally has historically not lasted long and this gap will close. How is the question. My guess is that US activity will cool, and we may see some resurgence in European activity. However, manufacturing sustainability in the emerging market will likely be a wild card, as their economies come under pressure from large current account deficits and currency volatility.
ISM August 2013 report
What you did not hear was that global PMI does not reflect the strength in the US. In fact, global manufacturing excluding the US remains flat at best. The following chart shows the US PMI versus the global PMI, excluding the US.
The disparities between manufacturing activity in the US and globally has historically not lasted long and this gap will close. How is the question. My guess is that US activity will cool, and we may see some resurgence in European activity. However, manufacturing sustainability in the emerging market will likely be a wild card, as their economies come under pressure from large current account deficits and currency volatility.
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