The JPMorgan Global Manufacturing PMI, compiled by Markit from its business surveys in 28 countries, rose from 52.1 in November to 52.7 in December, its highest since February 2014. The survey has signalled a steady upturn the pace of manufacturing growth in the second half of 2016 after indicating a near-stagnant malaise in the first half of the year. The December survey is broadly indicative of global manufacturing output growing at a robust annual rate of 4-5%.
Expansions were recorded in 20 countries in December with only eight reporting deteriorations. The strongest improvement was seen in the Netherlands, followed by Austria, while Brazil recorded the steepest decline, followed by Malaysia.
The value of construction put-in-place increased 0.9% during November following a 0.6% October gain, revised from 0.5%. Construction was up 4.1% y/y following stronger growth from 2012 through 2015. The latest rise compared to expectations for a 0.6% increase in the Action Economics Forecast Survey.
Private sector construction activity improved 1.0% (4.6% y/y) after a 0.1% October uptick. Residential building increased 1.0% (3.0% y/y) after a 1.6% improvement. Single-family building activity increased 1.8% (-0.9% y/y) after a 2.8% jump. The value of improvements rebounded 1.5% (+6.8% y/y) and made up October’s 1.0% decline. Multi-family building activity was off 2.7% (+10.7% y/y), the first monthly fall since July.
Public sector building activity improved 0.8% (2.6% y/y) following three months of strong increase. Commercial construction gained 0.5% (23.4% y/y) following two months of decline, and education facility activity increased 2.1% (6.2% y/y). Highway & street construction, which is roughly one-third of the public sector total, improved 1.1% (10.5% y/y), the third straight month of strong increase.
Six Reasons Construction Boom Won’t Last
1. Mortgage rates are rising and the Fed expects more hikes.
3. There’s a Glut in Luxury Apartments
5. Online sales killed department store sales.
6. 21 states plus D.C. have minimum wage hikes this year.
Don’t look for it, there was no #4!!!
- One item that stood out in the ISM report was inflation. The Manufacturing Prices Index rose to the highest level since 2011. Note that the higher “upstream” prices in manufacturing are a global phenomenon which we discussed back in November. (The Daily Shot)
Here’s a longer term chart from Bespoke:
Euro area annual inflation up to 1.1%
Euro area annual inflation is expected to be 1.1% in December 2016, up from 0.6% in November 2016, according to a flash estimate from Eurostat, the statistical office of the European Union.
Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in December (2.5%, compared with -1.1% in November), followed by services (1.2%, compared with 1.1% in November), food, alcohol & tobacco (1.2%, compared with 0.7% in November) and non-energy industrial goods (0.3%, stable compared with November).