Saturday, February 06, 2010

Manufacturing Turnaround As Lead Economic Indicator

For us, manufacturing conditions signify as a prime indicator to signify the state of an economy. This also applies to the world.

According to the Economist, ``SURVEYS of purchasing managers indicate that manufacturing industries in most of the world’s big economies are growing. In big emerging economies such as Brazil, China and India, the indices compiled by Markit, a provider of financial information, were well above 50 in January, indicating robust growth. In each of those countries manufacturing was still shrinking in January 2009. There has also been a pronounced turnaround in America, where the Institute for Supply Management’s index for January was 58.4, in contrast to 35.5 in January 2009. Manufacturing is also expanding in Germany, France and Britain. But it is still shrinking in Greece and Spain, though much less markedly than a year earlier."

From Danske

While manufacturing conditions may slow from their recent turbocharged activities, they aren't likely to "double dip" this year as alleged by perma bears-not when the steep global yield curve is likely to produce credit traction by the year end.

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