JP Morgan Global Index Rises in September
Global business activity index at highest reading since December 2007.
The JPMorgan Global All-Industry Business Activity Index increased to 52.9 in September, up from 52.0 in August, its highest reading since December 2007. The headline index has posted above the neutral 50 mark in each of the past two months. The average reading for the third quarter 2009 was 51.1, well above that for the second quarter.
According to the report, available on the Institute for Supply Management’s Web site, the manufacturing sector continued to report faster growth of output than services in September. Manufacturing production rose for the fourth month in a row. Although the rate of expansion was less robust than the previous month’s high, it was still above the long-run survey average.
The rebound in global services activity gathered pace in September, with the sector posting back-to-back increases. The rate of growth was muted compared to that in the manufacturing sector – as highlighted by a near 3.5 point differential between the respective output indexes – but was nonetheless the fastest for 21 months.
Supporting the latest expansion of global economic activity was a second successive monthly gain in incoming new work. The Global All-Industry New Orders Index registered 52.6, up from 51.1 in August. Manufacturing new orders rose for the third month running and to a much greater extent than seen at service providers. Service sector new business rose slightly for the first time in 16 months, with the rate of expansion the steepest since December 2007.
The downturn in the labor market continued in September, as job losses were reported for the seventeenth successive month. At 46.0, down slightly from 46.1 in August, the Global All-Industry Employment Index signaled a further solid decrease in staffing levels. However, the rate of reduction was substantially slower than that seen during the first half of the year.
Services providers cut employment at a moderately faster pace than in August and to a greater extent than manufacturers. Manufacturing employment fell for the eighteenth month running, but at the weakest pace since August last year. The Global All-Industry Input Prices Index posted 50.2 in September, down sharply from 55.9 in August, but above the 50.0 no-change mark for the second month in a row. Purchase prices rose in manufacturing, while costs declined at service providers.
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