PMI Composites Worse on Balance in June

In June, the S&P PMI composites improved in 6 of 25 countries and regional jurisdictions reporting in the table. Fifteen improved month-to-month in May and eleven improved month-to-month in April.

Over three months, 14 jurisdictions improved compared to their six-month averages. Over six months, 18 improved compared to their 12-month averages. Over 12 months, 14 improved compared to their average readings of 12-months ago.

The sequential averages show a significant trend toward improvement. However, monthly comparisons are not as upbeat.

In June, there was a relatively sharp increase in the number of jurisdictions with PMI values showing decline (PMI<50) as the raw count increased to 8 out of 25 from four in each of the two preceding months. The period averages have been showing fewer output declines with the number dropping from 9 over 12 months to 6 over six months and to 5 over three months. PMI readings below 50 had been becoming scarcer.

Average and median PMI reading had been improving with higher diffusion reported over six months compared to 12 months and another improvement over three months for the average but a step back for the median. Monthly there is no trend for the change, but the June readings are weaker than the April readings.

Queue percentile standings classify standings against all past readings expressed as a percentile positioning on data back to 2020. The average queue standing is in its 43.7 percentile while the median standing is at its 42.9 percentile. Only India and Egypt have queue percentile standings in their 80th and 90th percentile ranges. Spain manages a reading in its 70th percentile, Brazil comes close at a 69-percentile standing. But only eight of 25 percentile standings are above the 50% mark, which means above their historic median readings.

The improvement that had seemed to be in train was cut short this month but not sharply. Manufacturing sector gains did slow after improving sharply in May. The proportion of reporters showing month-to-month improvement in manufacturing slipped from 61% to 44% in June but the median reading in June did manage to tick higher to 50.8 from 50.6 in May. Service sector metrics are reported separately by fewer reporting units. But where they are reported as a separate reading, they weakened slightly in June but also broadly with improvement in only one-third of separate service sector reporters.

Global conditions are still fragile. Central banks are still tilted to easing, but many have slowed or are watching data trends with or without an easing bias. Conditions have become less clear cut and there is more watchful-waiting at mid-year than there was at the year’s start.