Global Stuff

Manufacturing reported good news yesterday. Does it make a difference?

Yesterday the nation’s purchasing managers noted that their index of manufacturing activity rose more than economists expected. Many had expected that the story of slowing economic growth would be confirmed yet again by another economic indicator. But this index didn’t keep to the story line, and showed that the nation’s factories increased production.

The details were impressive: of the 15 different industries broken out in the report, 11 increased and four decreased. The ones that went up were quite diverse-leather, electrical equipment, machinery, food. The ones that went down seemed to be centered around energy production and printing. This is unquestionably good economic news. Factory managers wouldn’t be expanding production if they didn’t have the orders in hand to do so.

But the really interesting story has to do with global production. By the broadest measures, US production is back to the level it was in 2005, up from its recession lows where it got back to 1998’s level. But global production has now surpassed the all-time-high that was set in March 2008. Global production has now grown beyond its previous pre-recession record.

We live in a global economy, and what was alarming about the financial crisis was it’s universal character: every place seemed to go into a downturn. But following an unprecedented level of international policy coordination, we seem to be on the road to recovery. With the world’s economy growing, any local slowdown should be short-lived.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-05T20:19:37+00:00 September 2nd, 2010|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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