Global metal-using industries are suffering their steepestdownturn since early-2016, according to December survey data. Theend of 2018 saw a contraction in output across all monitored groupsof metal users, as new orders declined amid worsening tradeconditions. As an indicator of worldwide output, this points to ableak outlook for the first half of 2019.
The IHS Markit Global Metal Users PMITM is acomposite indicator giving an accurate overview of operatingconditions at manufacturers identified as heavy users of aluminium,copper or steel.
As many metal users are producers of primary manufacturinggoods, these indices can give a solid forward-looking indicator ofwider manufacturing output trends in the short term, and followingthis, an indicator of worldwide growth in the medium term.
To illustrate the leading indicator properties of the data, theCopper Users PMI has a correlation of 0.91 with the JPMorgan GlobalManufacturing PMITM when leading by one month, whilealuminium and steel have correlations of 0.83 and 0.80respectively.
Furthermore, all three Metals Users PMIs have correlations of0.75-0.78 when compared with annual worldwide GDP growth with alead of five months. As such, these indices give a strongindication of global business performance over the following twoquarters.