Global Manufacturing PMI at three-month high in July

J.P.Morgan Global Manufacturing PMI

The global manufacturing sector forged ahead in July, registering a further month of improved business conditions. Although output growth slowed to a ten-month low, the pace of expansion in new orders strengthened.

At 52.7 in July, up from 52.6 in June, the J.P.Morgan Global Manufacturing PMI - a composite index1 produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM - signalled an improvement in operating performance for the seventeenth month in a row. The rate of expansion picked up to the fastest since April, but remained milder than at the start of the year.

 

Growth was again mainly led by European nations, while Asia continued to struggle in comparison. Eight of the ten best-performing countries were located in Europe, with Canada (fourth position) and Australia (tenth) the only other nations to break into the highest rankings.

European nations tended to benefit from strong inflows of new export business. The fastest rates of increase in foreign demand were seen in Germany, the UK, the Netherlands, Austria, Spain and France.

Around half of the Asian nations covered by the survey registered a contraction in July, including India, South Korea, Indonesia, Malaysia, Thailand and Myanmar. Growth gathered pace in China (despite remaining marginal), but slowed in Japan, Vietnam and the Philippines. Only Taiwan registered both a solid and accelerated rate of expansion in this region.

The US was in fourteenth position, despite seeing its PMI rise to a four-month high to signal a solid manufacturing sector upturn. Meanwhile, Brazil stagnated following three consecutive months of expansion.

Global manufacturing employment increased for the eleventh successive month in July, with the rate of jobs growth slightly above the average for this sequence. Among the largest industrial nations, staffing levels were raised in the US, in all of the euro area countries covered by the survey, Japan, the UK, Taiwan and South Korea. Cuts were registered in Brazil, Russia, India and China.

Input cost inflation accelerated for the first time in six months during July. This was partly due to supply chains being stretched by the sustained steady expansion of the global manufacturing sector so far this year. Average vendor lead times lengthened to the greatest extent in over six years during the latest survey month.

Part of the increase in costs was passed on to clients in the form of higher charges. Subsequently, average output prices rose for the sixteenth successive month and at the fastest rate since April.

Powered by Capital Market - Live News