Global manufacturing slowdown continues in October

At 52.1 in October, down from 52.2 in September, the J.P.Morgan Global Manufacturing PMI™ – a composite index1 produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – fell to its lowest level in almost two years, as rates of growth in output and new orders weakened. Please note that, due to a later-than-usual release date, October readings from the Philippines PMI survey were not included in the global numbers.

All three of the sub-sectors covered by the survey continued to expand in October. The bright spot was consumer goods, which saw its PMI rise to a four-month high. This contrasted with the trends in the intermediate and investment goods industries, which registered their lowest PMI readings since November 2016 and September 2016 respectively. 

October saw developed nations (on average) outperform emerging markets. This was mainly due to the ongoing strength of the US, which saw its PMI rise to a five-month high. The rate of expansion hit a four-month high in Japan, which (like the US) saw above global-average growth. Rates of increase slowed to the lowest since August 2016 in the euro area and to its weakest during the current 27-month sequence of expansion in the UK.

At 50.1 in October, the China PMI remained close to the stagnation mark. Growth rates hit four- and two-month highs in India and Brazil respectively, while Russia expanded for the first time since April. Among these larger emerging nations, only India registered a PMI reading above the world average. 

Global manufacturing production rose at the slowest pace in 28 months in October. Output growth was constrained by a weaker increase in new business, including a second successive month-on-month decrease in new export orders. The euro area, China, South Korea, the UK, Taiwan, Brazil, Turkey, Indonesia, Poland and Thailand all saw new export work contract. The US fared little-better, with its rate of increase in new export business easing to near-stagnation.

Global manufacturing employment rose at the quickest pace in six months. Among the larger nations covered, job creation was signalled in the US, the eurozone and Japan, whereas cuts were seen in China. Input cost inflation accelerated slightly, in contrast to an easing in the rate of increase in selling prices to a seven-month low.