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IHS Markit PMI and CIS data pairing provides key strategic
insights
Comprehensive sector and regional coverage
Short- and long-term developments monitored through monthly PMI
updates and quarterly/ annual CIS forecasts
IHS Markit is introducing a new product offering in the form of
combined expertise from our PMI™ and CIS (Comparative Industry
Service) teams. By providing both up-to-the-moment data through the
monthly PMI releases, and medium-to-long term forecasts via the CIS
team, we are better able to support businesses through strategic
and tactical decisions. The ability to isolate sectors by region
and end market has broadened the range of information we can use to
identify current and future trends in sectors.
With a potential crossover for numerous region-sector pairings
covering Global, Europe, Asia and US data, we are able to provide
monthly, quarterly and annual data to aide business decisions such
as; identifying turning points in client demand in end markets,
where to plan investment over the coming years, insights into
supply chain management and, importantly, how long it will take
specific economies and sectors to recover from economic shocks.
CIS forecasts and PMI data working in
tandem
PMI data and forecasts modelled by the CIS team have long been
working together to provide key insights into industrial production
and output when official data is unavailable. Near-term data is
published at the start of each month and provides firms with not
only an outlook for the coming quarter, but also greater detail on
emerging trends in sectoral performance. Being able to identify
turning points in vendor performance and new order inflows across
regions and sectors can be vital information when considering where
to invest and how to safeguard against supply-chain shocks.
The provision of up-to-the-moment data during times of increased
uncertainty and instability is invaluable, with greater knowledge
helping to ensure considered and balanced approaches to significant
investment or operational decisions.
PMI data identifies turning points
When looking to examples of the two datasets working in tandem,
we largely focus on the CISQ dataset. This is a quarterly release
of an industrial production index, fusing together historical
official data and the latest CIS sector forecast. The close
relationship between PMI and historical official data lends itself
to such a comparison. The complementary nature of the PMI and CIS
data sets can also be seen through the lens of the different
sources of the data. PMI from unique surveys and CIS from official
national accounts data. When data from both of these very different
sources is pointing in the same direction, they send very powerful
signals in relation to sector performance.
As we can see from examples in the chemicals and automotive
industry, the inclusion of PMI data in any analysis can quickly
help identify the speed at which the sectoral landscape is
changing, and therefore allow businesses to adapt their plans in
real time.
The impact of such assessment is not limited to the
manufacturing sector, however. During the pandemic, the service
sector has been hit hard and this has been seen time and time again
in national and PMI data by sector. The impact on consumer-facing
businesses has been marked, but also industries which rely upon the
movement of goods and people. The transportation sector saw a
significant decline during the depths of the initial lockdown
period in the spring of 2020 and began to gradually move towards
recovery in the latter stages of the year. That said, the Global
Transportation Business Activity Index only went above the 50.0 no
change mark twice in 2020, once in January and a second time in
November, with the recovery plateauing in January 2021.
Real-time changes in business activity trends are by no means
the only signals PMI data can pick up. Recent supply-chain shocks
have been indicated through significant deteriorations in vendor
performance, but also substantial increases in input costs.
Although all monitored sectors saw an increase in cost burdens in
the latter stages of 2020, the pace of such price rises varied
greatly. By analysing the rate of input price inflation, and noting
the point at which firms in individual sectors are able to pass on
higher costs to clients, we can better understand demand
conditions, business confidence and the stability of cash flow, all
of which will have a profound effect on investment and production
decisions going forward.
In an ever-changing time of virus restrictions and lockdown
measures, it is crucial that forecasts and data provision utilise
the most up-to-date data such that businesses can make informed
decisions. The impact of lockdowns has been wide-reaching and
significant, with monthly data helping identify what this snapshot
means in the near-term as well as any changes this may bring to
forecasts.
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.
