The chart below shows the GDP-weighted calculation of the Big 8 PMI compared with the year-on-year rate of change in my weighted industrial production index for the Big 8.
I have used a new technique to estimate the latest values for individual industrial production indices. I have estimated (using a tweak of the Chow-Lin technique) the latest one or two months of IP using that country's PMI, where there is a close relationship, before adding up the individual countries/regions' IP to get the total. Normally, industrial production will be one, two or three months behind the PMI.
The mini rebound in the Big 8 PMI and in industrial production appears to be fading. However, the year-on-year rate of change is still above zero. This is not yet a recession, and we won't have one until services start to retreat. There are some tentative indications from services PMIs that that might be beginning.
[The Big 8 are: The USA, Euro zone, China, Japan, The UK, Brazil, Russia, and India]
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