Manufacturing PMIs: Ready to Flip the Calendar- Not the Message

The readings improve a bit in December, moving the median to 49.7 from a 3-month average of 49.3. The average of manufacturing among reporting Asian contributors have moved up above 50. The BRIC average remains above 50 but has slipped a bit lower on the month.

However, overall, the percentage of reporters that improved month-to-month is only 27.8%. Two thirds improve over three months compared to six-months based on comparing the averages; 22% improve over six months compared to 12-month averages. And two-thirds improved over 12 months compared the 12-month average from one year-ago. This is not a strong record of improving trends based on breadth.

The changes in the medians calculated over 12 months, 6 months and 3 months show that the median readings have been steadily eroding.

The queue standing places an ordinal ranking on each contributor over data since January 2020. Among the 18 reporters in the table, only five have queue standings above their 50% level (above their respective medians calculated over this period). Four of the countries have standings in the 50-60 percentile range with the highest rankings at a 63.3 percentile standing (Taiwan). China, India, Mexico, and Canada (all either BRIC or U.S. MCA members) are the remaining countries with standings above their historic medians.

Eight reporters in the table have PMI values in December that are above the values they posted in January 2020. The strongest reading is reported by Russia, at a gain of 2.9 points (really?) with the weakest, a drop of 9.1 points in France. The U.S., the U.K., Germany, and the euro area all have drops over this period of 2.5 points or more. The most developed countries seem to be having the hardest time during this episode.

PMI standings log a median at 38.3% for reporting countries over the last five years of data. The High-Low percentages find that Mexico, China, and India have standings in the upper 20 percentile of that range (as opposed to their queue percentile) of data. Only the most developed countries and the euro area, Germany, France, the U.S., the U.K., and Brazil have percentile standings below their high-low midpoints (below the 50 mark).

While the U.S. economy is showing signs of ongoing and even improving growth, the rest of the world is not. Even in the U.S., manufacturing is the laggard sector. The graph shows that since early-2023 there has been little improvement.