Economy in Brief

The composite PMI readings from S&P Global in January largely show improvements although clearly amid mixed performance. The trends are largely still weakening but January provides some pickup. The JP Morgan global PMI for example improved to 49.8 in January from 48.2 in December. The HSBC emerging market index has a PMI value of 51.9 in January compared to 50.1 in December. The developed markets index has a diffusion rate of 48.4 in January up from 47.1 in December. Despite these month-to-month increases, the global PMI index from JP Morgan shows deterioration from 12-months to six-months to three-months based on the PMI averages. The HSBC emerging market index deteriorates as well although with some mixed messaging. Emerging markets have a PMI average for 12-months at 50.2 that improves to 50.7 over six months and then falls back to 50.3 over three months. The developed markets index sequentially deteriorates from 50.7 to 47.9 to 47.6.

Queue standings are weak with few exceptions The standings of these various aggregated indexes are also weak. The JP Morgan global PMI has a 20% queue standing on data back to January 2019; on that same timeline the HSBC emerging market index has a 51-percentile standing, barely above its median, while developed markets have a puny 14.3 percentile standing, clearly well below the history median (which occurs in all cases at a queue standing below 50).

A breadth of monthly progress The unweighted average and overall median indexes across all the countries and the EMU show increases in January after posting increases in December as well. The number of jurisdictions with readings below 50 declines somewhat sharply in January to 11 from 17 in December compared to 17 in November. This is a count of 25 jurisdictions that includes all the elements in the table from the U.S. market composite down to Nigeria excluding the three market groups at the top of the table. Also, January finds five regions slowing compared to 10 in December 13 in November. Slowing refers to lower PMI values month-to-month. So, there has been some progress in the composites that's driven not just by large countries but by unweighted numbers.

Still…sequential weakness However, the 3-month, 6-month, and 12-month averages show ongoing weakness on that sequence for the averages and medians for this 25-country grouping. In addition, the number of jurisdictions with values below 50 increases from 7 over 12 months to 14 over 6 months to 16 over 3 months. But the number of jurisdictions showing slowing declines slightly from 18 over 12 months to 17 over 6 months and to 14 over 3 months.

PMI levels are uniformly weak with few exceptions There is little disagreement among the queue standings. The queue standings are weak, up and down the line. Among under 25 entries in the table, only 8 have queue standings above the 50th percentile, meaning that they are above their historic medians since January 2019. The strongest of them is Zambia with the 91.8 percentile standing (but…on a PMI value of only 50.6!). The next strongest is India at an 81.6 percentile standing, Hong Kong and Japan have standings in their 70th percentiles, Saudi Arabia, Kenya, and Italy have standings in their 60th percentiles. But the unweighted overall average standing in the table is at the 40.6 percentile mark with the median at the 36.7 percentile. These are weak readings.