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Top three PMI sectors register sharp activity growth during
October
Underlying data reveals sub-sector divergence
Strong Financials performance supported by the US
Europe and Asia drive expansion in Basic Materials
As the global economy continues to recover following the
lockdown-induced decline in activity earlier this year, PMI sector
data shed light on which industries are rebounding at the quickest
pace.
The PMI rankings for broad industry sectors in October revealed
strong performances for Financials, Basic Materials and Consumer
Goods, each of which registered quicker-than-average activity
growth. Meanwhile, Consumer Services remained the worst performing
sector, recording a ninth consecutive monthly contraction in
output. The only other market segment to see a reduction in
activity was Telecommunications Services, while the remaining three
categories, namely Healthcare, Industrials and Technology, posted
modest expansions.
Chemicals, Autos and Banking among strongest performing
sub-sectors
More granular PMI sub-sector data provide insight into the
driving forces that contributed to the strong performances across
Basic Materials, Consumer Goods and Financials in October.
The rise in activity for the Basic Materials sector was
predominantly supported by Chemicals producers. However, the
industry expansion also received some support from Resources, which
was in turn centred on Metals & Mining. Meanwhile, Forestry
& Paper Products production stagnated.
Within the Consumer Goods industry, Automobiles & Auto Parts
was the strongest performing sub-sector, while Food & Beverages
producers lagged behind. The latter has continued to struggle amid
a decline in hospitality and leisure activity since the onset of
the pandemic. Meanwhile, manufacturers of Household & Personal
Use Products recorded output growth that was broadly in line with
the wider Consumer Goods average.
Growth in the Financials sector was largely centred on marked
increases in activity for Banks and Real Estate companies. The
other two monitored financial services sub-sectors, namely
Insurance and Other Financials, posted moderate expansions.
US lags in Basic Materials, but leads in
Financials
Although the Basic Materials, Consumer Goods and Financials
industries expanded sharply at the global level during October,
growth rates varied substantially between regions.
For Basic Materials, increased activity was predominantly driven
by European and Asian companies, with the latter posting the
quickest output expansion since December 2010. Meanwhile, despite
recording the fastest rate of growth since January 2019, Basic
Materials firms in the US posted a far softer rise in output than
the global average.
In the Financials industry, however, US firms were by far the
strongest performers, recording the quickest output expansion for
over six years. Asian Financial businesses saw solid activity
growth, but in Europe there was a marginal decline.
Meanwhile, in the Consumer Goods sector, European businesses
registered a far quicker expansion than in Asia and the US for the
fourth month running.
Going forward, PMI sector data will continue to provide a timely
indication of how different segments of the global economy are
dealing with COVID-19 pandemic. The next release of global PMI
sector data is on the 4th of December 2020.
Purchasing Managers' Index™ (PMI™) data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.
