J.P.Morgan Global Manufacturing PMI ™
Global Manufacturing PMI at lowest level since September 2016:
The global manufacturing sector continued to register a subdued performance at the close of 2018. Output growth remained weak, while rates of expansion in new orders and employment both slowed.The trend in international trade flows also remained weak, with new export business declining for the fourth straight month.
The J.P.Morgan Global Manufacturing PMI™ – a composite index 1produced by J. P . Morgan and IHS Markit in association with ISM and IFPSM –fell to a 27 - month low of 51.5 in December, down from 52.0 in November. The average reading over the fourth quarter (51.8) was the lowest since quarter three of 2016.
Due to a later - than-usual release date, final data for the Japan Manufacturing PMI were not available to include in the global readings. Flash PMI data for Japan were used instead.
The consumer goods sector was the brightest spot for the global manufacturing industry, with its PMI rising to an eight - month high following a solid acceleration in output growth. In contrast, PMI readings at intermediate and investment goods producers fell to 28 - and 27 - month lows respectively and levels consistent with only mild growth. Investment goods output stagnated as new order inflows decreased for the second time in the past three months.
Developed nations (on average) out performed emerging markets in December, although growth eased in both cases. PMI readings were above 50.0 for 20 out of the 30 nations for which December data were available, including the US, the euro area, Japan, the UK, India, Brazil and Australia. Countries with PMI figures below the neutral 50.0 mark included China, France, Italy, Taiwan and South Korea.
The rate of expansion in global manufacturing production stayed close to October’s 28 - month low in December. New order growth was the weakest since August 2016, while new export business fell for the fourth month in a row. This filtered through to the labour market and business confidence. The pace of job creation slipped to its lowest in over two years, while the degree of optimism among firms was the weakest in the series history.
Price inflationary pressures eased further at the end of 2018. Input costs rose at the slowest rate in 17 months, while the pace of increase in output charges was the weakest since May 2017. Selling price inflation eased (on average) in developed nations, while charges fell in emerging markets for the first time in almost three years.
Commenting on the survey, David Hensley, Director of Global Economic Coordination at J.P.Morgan, said:
“The December PMI surveys signalled that the global manufacturing sector ended 2018 on a subdued footing. Output growth remained stubbornly low, rates of increase in new orders and employment slowed and international trade flows deteriorated. The outlook also remains relatively lacklustre, as business confidence dropped to its lowest level in the series history. ”