The latest report for FBN’s manufacturing Purchasing Managers’ Index (PMI) shows a modest improvement from 50.2 in June to 51.0.
The index update is a familiar data release at the start of the calendar month in developed markets (such as the ISM’s in the US), the larger emerging markets such as China and a few other frontiers.
It is based on the responses of manufacturers on core variable in their businesses and the survey was conducted by NOI Polls.
PMIs are forward-looking indicators of sentiment, and have the proven capacity to move financial markets. By way of example, the flash reports for manufacturing and services PMI for the UK for July last week led to a sell-off in GBP and a boost to UK equities on hopes of rate cuts.
The modest upticks in the headline reading in both June and July suggest that manufacturing may have climbed onto a plateau.
In the latest, researchers noticed a marked trend towards no change as the respondent’s preferred answer: this was the case for 68% of respondents on output, and 52% of delivery times, for example.
According to the analysts, “if we have reached a plateau, then the recent floor came in quarter one when manufacturing GDP contracted by -7.0%.”
