The S&P Global Composite Purchasing Managers’ Index (PMI) came in at 48.9 in December, up from November’s 46.3. As a result, the index moved closer to the 50.0 no-change threshold, signaling a softer deterioration in private sector operating conditions compared to the previous month.
Meanwhile, the Manufacturing PMI clocked in at 47.4 in December, up from November’s 46.2. Lastly, the services PMI activity index rose to 49.0 in December (November: 46.1).
The print suggests a slightly less glum economic outlook ahead, with manufacturing and services output falling at the weakest rates in six and five months, respectively. Input inflation fell to the lowest since March 2021, while output inflation fell to the lowest since August 2021, supporting demand. On employment, jobs rose at a similar pace than October and November. Business sentiment improved, especially among services firms, which turned optimistic. The bottom line remains grim, however: the economy still appears set to contract in Q4 2022 and Q1 2023, with still-high inflation and rising interest rates dragging on demand at home and abroad.
FocusEconomics Consensus Forecast panelists expect fixed investment to contract 0.5% in 2023, which is down 0.5 percentage points from last month’s forecast. For 2024, panelists see fixed investment growing 3.0%.