The latest batch of manufacturing PMIs was a mixed bag. On balance, they show that global manufacturing continues to expand, though at a moderate pace. This is confirmed by the CRB raw industrials spot price index, which is my favorite indicator of global industrial production. It dropped last year by 11.5%. So far this year, it is up 6.3% through March 1, and has been moving sideways over the past couple of weeks. Let’s have a closer look at production around the world:
(1) China’s M-PMI edged up to 51.0 during February. The production index was at a nine-month high of 53.8, while the orders index rose to 51.0. There is a good correlation between China’s industrial production index and electricity output. Both slowed late last year, which explains why the People’s Bank of China has lowered bank reserve requirements twice since early December.
(2) In Europe, Greece, Spain, and Italy are in recessions with PMIs during February of 37.7, 45.0, and 47.8, respectively. That last number is actually an improvement for Italy from a recent low of 43.3 during October 2011. Greece is at a new record low. Spain remains in a plain. The rest of the EU’s PMIs are mostly around 50, which isn’t so bad given all the bad news coming out of Europe since last summer.
(3) In the US, the M-PMI was weaker than expected given the strength of regional business manufacturing surveys during February around Chicago, NYC, Philadelphia, Richmond, and Dallas. The national index edged down from a seven-month high of 54.1 during January to 52.4 during February with comparable declines in production, orders, and employment. (More for subscribers.)