Global Economy
Global manufacturing in July weakest level in two years
By Michael Hennigan, editor of Finfacts
Aug 4, 2015 - 7:49 AM

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Growth in the global manufacturing sector remained lacklustre at the start of the third quarter. At 51.0 in July, unchanged from June, the JPMorgan Global Manufacturing PMI (purchasing managers' index) – a composite index1 produced by JPMorgan and Markit in association with ISM (US Institute for Supply Management) and IFPSM (International Federation of Purchasing and Supply Management)  — registered its joint-weakest reading during the past two years.

The surveys of about 10,000 executives showed that manufacturing output rose for the thirty-second successive month in July, with the rate of expansion ticking higher from June’s recent low. The strongest expansions in production were in the Czech Republic, the Netherlands, Italy and Poland. The US also remained close to the top of the global manufacturing output growth league table, seeing its rate of expansion pick up to a three-month high.

The Eurozone’s manufacturing sector largely shouldered the immediate impact of the Greek debt crisis, as manufacturing output in the region expanded at the joint-fastest pace during the past 14 months.

Markit said that alongside the robust growth in the Netherlands and Italy, production also rose in Germany, Spain and Austria. France reported a mild contraction The impact on the Greek manufacturing sector was substantial, however, with rates of decline in output, new orders and employment accelerating sharply to the steepest in the (Greek) survey history.

The downturn in Asia continued, with contractions in China, Taiwan, South Korea, Indonesia and Malaysia offsetting solid expansions in Japan and India. Production also fell in Brazil and Russia.

Underpinning the increase in output was further growth in new order inflows. However, the pace of improvement in new business slowed as new export orders declined for the second time in the past three months. New export business decreased in China, Germany, France, the UK, Taiwan, South Korea, Greece, Turkey, Indonesia, Vietnam, Russia and Brazil, and was little-changed in the US and Malaysia.

Manufacturing employment rose for the twenty-fourth straight month in July. However, the rate of jobs growth was marginal and broadly in line with the average for that sequence. Staffing levels rose in the US, the Eurozone, Japan, the UK, Mexico, Taiwan, Turkey and Vietnam. Headcounts were lowered in Russia, Switzerland, China, India, South Korea, Indonesia, Brazil and Malaysia. Average input costs rose for the fifth successive month in July, despite the rate of inflation easing to its weakest since April. Meanwhile, average selling prices fell slightly following modest gains in each of the prior two months.


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