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The global manufacturing sector ended 2010 on a strong footing, Rates
of growth in production and new orders accelerated, leading to a further solid
increase in employment. At a six-month high of 55.0 in December, the JPMorgan
Global Manufacturing PMI (Purchasing Managers' Index) pointed to a robust
improvement in overall operating conditions.
The PMI has remained above the 50.0 nochange mark
throughout the past one-and-a-half years. The average reading for the PMI in Q4
2010 was above that in Q3 but below the six-year high reached in the second
Manufacturing production increased for the nineteenth month running in
December, with the pace of expansion the fastest since June. Moreover, the
average rate of growth during 2010 as a whole was the quickest since 2004 and
the second-sharpest since the series began in 1998. The expansion in output
remained broad-based by nation, with only Japan and Greece reporting
contractions. Growth accelerated sharply in the US and the Eurozone, while also
remaining strong in China.
Growth of new orders also picked up in December. Although the rate of
increase hit a seven-month peak, it was well below those generally seen at the
start of the year. Incoming new work has now risen for 18 consecutive months.
Higher levels of new business were seen in the US, the Eurozone and China, while
Japan and Greece were the only nations to report reductions.
International trade volumes continued to improve in December, as highlighted
by an increase in new export orders for the eighteenth successive month.
However, the rate of growth eased slightly to a three-month low and remained
below the average for the current sequence of increase.
December saw global manufacturing employment rise for the twelfth month in a
row. Amongst the major industrial regions covered by the survey, job creation
was seen in the US, the Eurozone (including a survey record rate of increase in
Germany) and China. In contrast, Japan saw a modest reduction in staffing levels
for the fifth month running.
Average input prices rose at the second-fastest pace since April's 20-month
peak in December. Higher costs reflected increased prices for cotton, food
products, fuel, metals and timber. All of the countries for which data were
available reported an increase in purchase prices. The sharpest rates of
inflation were seen in Taiwan, Denmark, Russia, the Eurozone, the US and China.
Part of the increase in input costs reflected ongoing supply chain pressures.
This was highlighted by a further marked lengthening in average vendor lead
Commenting on the survey, David Hensley, Director of Global Economics
Coordination at JPMorgan, said: "December
saw the PMI indexes for output and new orders push further away from their
recent lows. This acceleration towards year-end suggests the sector will enter
2011 on a firmer footing than looked likely at the end of Q3. Job creation also
remained solid, which will be a boost for the broader economic recovery."
The Global Report on Manufacturing is compiled by Markit based on the results
of surveys covering over 7,500 purchasing executives in 29 countries. Together
these countries account for an estimated 90% of global manufacturing output. PMI
data for the United Kingdom were not available for inclusion in the Global PMI
at the time of publication.
US manufacturing and construction spending, with CNBC's Steve Liesman & Rick Santelli: