5 Stocks To Buy On Global Manufacturing Resurgence

Fresh data indicates that global manufacturing is undergoing a revival. Output across the U.S., U.K., China and Japan has increased after a considerable lull. This comes as welcome news for the sector which has been embattled over the greater part of the last two years.

Indeed, such data provides hope for a resurgent global economy in the days ahead. It makes good sense at this point to invest in companies from the sector from the four countries currently leading the manufacturing charge.

Global Manufacturing RisesISM Index Hits Record High

According to financial major JPMorgan Chase & Co. (JPM - Free Report) a global resurgence in manufacturing is underway. The financial major’s global manufacturing PMI for December increased by 0.4 points to hit 53.8. This is the highest level recorded in more than two years. According to JPMorgan, the latest reading indicates that global production is growing at an annualized rate of 3.7%.

This marks a significant improvement over 2015 and the first half of 2016 when output growth was recorded at a mere 1.1%. JPMorgan believes that stronger pricing power and projected increases in profits and expenditure is likely to provide a major boost to manufacturing worldwide this year. Currently, the financial major’s 2017 growth forecast for manufacturing stands at an average of 2.5%.

Nowhere is this improvement more marked than in the U.S., as recent data reveals. The ISM manufacturing index rose from 53.2% in November to 54.7% in December and reached its highest settlement in last two years. The manufacturing index has expanded over nine months out of last ten months. This was also higher than the consensus estimate of 53.8%. Meanwhile, U.S. construction spending increased to its highest level since Apr 2006 in November.

China, U.K., Japan Notch Up Manufacturing Gains

Meanwhile, the China Caixin manufacturing PMI increased from 50.9 in November to 51.9 in December. The reading exceeded all forecasts and hit its highest level in six years. Lending and construction has picked up in the country, boosting overall demand. Output has increased at the quickest rates since Jan 2011 while new orders also clocked up gains.

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