More than 50% of world PMI indices are now rising

 These two apparently similar charts show different things.  

The first shows my world manufacturing PMI index (green) with a diffusion index of the 53 component countries' PMIs (orange).  A diffusion index measures how many of the selected time series are rising, and how many falling.  At 0, all are falling, at 100, all are rising, and at 50 --- well you get the picture.

What this chart shows is that 70% of the PMIs I monitor are rising.     It doesn't mean that they are above the 50% recession line.  For example, Austria's PMI has risen from 38.8 in July to 43 in February.  So Austria's economy is still deteriorating, just more slowly.  A diffusion index tends to lead the underlying data, as you can see in the chart.  The rising diffusion index suggests that the PMI will keep on rising, for now, which means it will soon cross the 50% "recession line".

This chart shows the percentage of monitored PMIs which are above 50%.  Note that this coincides with my world PMI index.  More than half the countries I monitor have PMIs below 50%, which means that more than half still have weakening economies, even if they're declining more slowly.

For non-initiates, this can be a bit confusing.  After all, the PMI indices (and most business confidence indices) are themselves diffusion indices!  So, jumping to the conclusions:

• PMI surveys tend to lead the economic cycle.
• when they rise above 50%, they show that their economy is growing
• the majority of PMI indices are rising, and the trends shown in chart 1 suggest that will continue
• but the majority of PMIs are also still below the 50% "recession line", showing that the world economy is not yet accelerating.