A soft phase for manufacturing that began in June 2022 appears to have ended
April 3, 2024
Key Observations:
S&P Global's world manufacturing PMI measure has advanced to 50.6 (Mar-24). This is the highest reading in that series in 20 months (51.1, Jul-22).
Looking at mix, Emerging Markets manufacturing PMI has reached 52.0 (Mar-24). The analogue metric for Developed Markets has treaded water at 49.3 for the past two months. This figure made a recent trough nine months ago (46.3, Jun-23).
However, the DM figure is burdened by renewed deterioration in the world's third-largest economy, Germany (41.9 in Mar-24 from a TTM high at 45.5 in Jan-24). This weakness masks coincident improvement in France (46.2 in Mar-24 from 42.1 in Dec-23) and obscures the more important advance to industrial expansion in the world's largest economy, the United States of America (51.9 in Mar-24 from 46.3 in Jun-23).
Meanwhile, India has moved from strength to strength (59.1, Mar-24), and China's slow grind higher is finally finding sufficient traction to support a bull market in energy and metal commodities.
At the same time, a line item in Japan's latest industrial production report reinforces our existing concerns about global motor vehicle production. Feb-24 output: –11.1% NSA and –7.9% SA. In mitigation, an event at Toyota is idiosyncratic.
Beneficial for: ANTO, FCX, SCCO, AA, RIO.
Source: S&P Global, METI, IMF, Blacklight Research. Note: bubble size is proportional to GDP in constant USD (2023), on IMF estimates.
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