Global PMI Indicates Slower Expansion

The JP Morgan Global PMI was at a six-month low in April but indicated manufacturing remains in the expansion range. At 51.9 the score reflected weaker production and new orders. The PMI was negatively affected by the downturn in production and new business that followed an increase in sales tax in Japan. The US and UK showed acceleration in output and new order growth. The Eurozone hit a three month high for output and was close to the three year high seen in January. Asia manufacturing output declined in China, South Korea and Indonesia. Brazil and Russia production fell in April.

Commenting on the survey, David Hensley, Director of Global Economics Coordination at JP Morgan, said: “Growth of global manufacturing output and new orders slowed during April. However, this mainly reflected the timing of a change in sales tax in Japan that impacted on the performance of that nation’s manufacturing sector. The effects of this should only be temporary and, with rates of expansion tracking slightly higher on average elsewhere, growth of world IP should settle back at its Q1 pace moving towards mid-year.”