Markit PMI helps gauge business conditions
The Markit Economics PMI (purchasing managers’ index) surveys are helpful when it comes to understanding business conditions in any economy. For example, investors in the European Union economy (VGK) can use this tool to assess whether the monetary stimulus from the European Central Bank is helping industrial activity pick up.
The US industrial sector is dominated by companies like General Electric (GE), 3M (MMM), Caterpillar (CAT), United Technologies (UTX), and Boeing (BA). Investors in these companies are interested in the Markit US Manufacturing PMI monthly reading. This reading could help them track any rise or fall in the economy’s industrial activity that could substantially affect their investment in the US industrial sector (XLI).
The industrial sector is crucial to growth
The industrial sector serves as the growth engine for an economy, providing employment, infrastructure, producer goods, consumer goods, and export competitiveness. The industrial sector reports also affect broad-market investors, such as those invested in the SPDR S&P 500 ETF Trust (SPY) and the iShares Core S&P 500 ETF (IVV).
A business activity scorecard
The Markit PMI report serves as a business activity scorecard for an economy. This monthly economic survey provides insight into the private-sector economy by tracking variables such as output, new orders, employment, and prices across key sectors. Many policymakers use this data while making interest rate decisions that affect the economy at large.
On August 3, Markit released its July Global Manufacturing PMI report. The report helps assess growth and trends in world manufacturing. Let’s take a look.