Based on our leading indicator*, global industrial production growth will accelerate at the fastest pace since March 2011. This is the first time that all countries/regions included in our model are in expansion mode with a PMI above 50. This suggests that the demand for raw materials will remain strong and robust going forward.
The breakdown per region can be seen in the top graph. The size of the bubble reflects the size of the countries industrial production (IP) and thus the weight in the Global Industrial Production Proxy. China’s manufacturing PMI of 50.8 is down 0.2 from October, and down 0.1 points YoY, but remains in expansion mode. The U.S. PMI of 58.2 was down 0.5 from October. However, it is still up 5.0 points YoY and remains firmly in expansion mode. Industrial production growth in the Eurozone is growing at the fastest pace in our time series (starts Dec-2006) with a PMI of 60.1, up 1.6 points MoM and up 6.4 points YoY.
*Based on Manufacturing PMI’s from countries representing 84% of global industrial production. We us the PMI as this often is a leading indicator on the Industrial Production.