Tags: Manufacturing | Index | Raises | Global | Inflation | Fears | ft

FT: Manufacturing Index Raises Global Inflation Fears

Wednesday, 02 Feb 2011 09:02 AM

A survey of purchasing managers worldwide shows manufacturing is on the rise, more hiring is on the way and so are rising consumer prices, the Financial Times reports.

The composite global PMI index, compiled by JPMorgan and Markit economics, hit 57.2 in January, up from 55.6 in December and the highest reading on this measure since the series began in 1998. That's good news for job seekers.

"The manufacturing recovery has regained traction, but even more pleasing is that the [global manufacturing] labor market has begun to create jobs," says Rob Dobson, senior economist at Markit.

However, economists say, increased manufacturing means increased demand for commodities, and that means higher consumer prices in the end.

"Inflation pressures are coming from all sides, demand and supply, and international commodity prices are now adding to the challenge," says Leif Eskesen, HSBC’s India chief economist.

Some even caution that hiring may not seriously pick up in the U.S. manufacturing sector, at least enough to put a dent in high unemployment rates.

"The employment index has been at a relatively high level for some months now, but manufacturing payrolls have actually continued to decline," says Paul Ashworth, of Capital Economics.

U.S. consumers, meanwhile, are still hesitant to spend and pump up the economy due to unemployment and inflationary fears.

"The U.S. jobless rate remains at the heart of the issue for Americans," James Russo, vice president of The Nielsen Company, tells Reuters. "It has topped 9 percent for 20 months straight, which is the longest streak on record."

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A survey of purchasing managers worldwide shows manufacturing is on the rise, more hiring is on the way and so are rising consumer prices, the Financial Times reports. The composite global PMI index, compiled by JPMorgan and Markit economics, hit 57.2 in January, up from...
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