Want To Know Where A Countries Economy Is Headed? Ask the Purchasing Managers.
The Purchasing Managers are the best people to get an indication of an economy’s direction, whether it’s headed up or down. These are the people whose job is on the line. They must accurately predict whether their companies will need more raw materials, supplies, and components or less.
When times are good, and their business is expanding, they’re buyers (PMI Index above 50). And, of course, when times are bad, they don’t buy (PMI below 50).
Each month several research firms survey the Purchasing Managers in each country to determine if they’re buyers or not.
India
For June, the most optimist Purchasing Managers on the planet are in India. As we pointed out in a previous article (https://www.valueside.com/?p=4786), Prime Minister Narendra Modi’s decision to purchase Russian oil had given that country cheaper energy than it enjoyed in some time, and also opened up an entirely new market, as it is now selling refined Indian, Russian-produced oil to European.
With a composite PMI reading of 59.4, India takes the top spot in major economies’ economic outlook.
Russia
Taking second place in our major economies’ composite PMI Measure is Russia. The War in Ukraine has put Russia solidly on a war footing, as their purchasing managers have geared up to support the Russian military. We heard estimates that Russia may be firing as many as 60,000 artillery shells per day. That requires quite a manufacturing effort and has given Russia a reading of 56.8 on their Composite PMI.
As we pointed out on Monday (https://www.valueside.com/?p=4823), Chinese Purchasing Managers are still optimistic, but barely. With a composite PMI reading of just 50.2 (a mere 2/10ths above the contraction level), the Chinese economy bears watching closely.
Two major European countries slipped into PMI contraction last month as Italy and France slid below that magic 50 number. Italy came in at 49.7, while France was the weakest of all the major economies, with a composite PMI of just 47.2. I guess those riots in France are beginning to take a toll.
Germany has a composite PMI reading of 50.6 and is on the cusp of contraction.
The American manufacturers recorded the most startling PMI reading for June. With a reading of just 46.3, United States factories scored lower than France. For the Americans, this is the polar opposite of their service (non-manufacturing) sector. Service PMI for the State was a sparkling 54.1; this kept America’s composite score still expansive. But it shows just how one-sided the American economy is.
That’s a recap of the Global Purchasing Managers Index. For a complete report, go to:
