• Leading indicators continue to look strong globally. Some indicators give an early warning of a growth peak in Q1 2010, but from a fairly high level.
    • Global PMI fell back slightly in November. However with a reading of 55.1 it still indicates expansion in the global manufacturing industry. The global order-inventory balance expanded somewhat in November, pointing to a further rise in the PMI index going forward.
    • OECD’s leading indicators continue to point to strong growth, but monthly changes have started to decline a bit, pointing to a peak in global growth in Q1. Growth in commodity prices is also losing a bit of momentum.
    • In the US, ISM fell slightly to 53.6 from September’s reading of 55.7. But with new orders higher and inventories lower, the order-inventory balance improved. Our own inventorydemand ratio remains at a very high level. Going forward we expect to see further improvements in ISM, reaching a peak around 60 over the next three months.
    • Euroland continued its improvement with PMI rising to 51.2 compared to October’s reading of 50.7. The orders-inventories balance is unchanged at a very high level. Ifo expectations continued higher while ZEW rolled over giving an early warning of a growth peak in Q1. German orders continue to rise strongly. In UK PMI fell back driven by new orders. In Scandi, leading indicators improved further with Swedish PMI being the exception as it fell back in November.
    • In Asia production growth is easing a bit but is still at a fairly high level. CEE PMIs finally broke the important 50 level signalling an expansion in the manufacturing industry. Especially Poland performed strongly. Russia disappointed with the new orders index falling back below 50.
    • Outlook: We expect Global PMI’s to rise further in coming months, although it will probably be a more uneven path from here. We expect momentum in OECD’s leading indicators to moderate as also seen in the growth of commodity prices. This would underpin our expectation that global growth will be strong in the short term but level off from a high level in Q1 2010.