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Global manufacturing growth slows at start of Q3

Staff Writer | August 3, 2018
The rate of global manufacturing expansion slowed again at the start of the third quarter.
Global manufacturing
World   The intermediate goods sector PMI ticked up to a three-month high
At 52.7 in July, down from 53.0 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 – posted its lowest reading for one year.

The slowdown reflected weaker growth in the consumer and investment goods industries.

PMI readings for these subsectors fell to 13- and ten-month lows respectively, as rates of expansion eased for both production and new orders.

The intermediate goods sector PMI ticked up to a three-month high, with its output and new business components signalling stronger increases compared to June.

The US remained one of the strongest performing national manufacturing sectors in July.

Although the US PMI dipped to a five-month low, it remained at a solid level and comfortably above the global average.

The euro area was also a bright spot, achieving a rate of expansion close to that of the US.

That said, the Eurozone PMI is currently much lower than the highs scaled before the turn of the year.

Growth across Asia remained subdued compared to that seen in Europe and the US.

PMI readings for China, Japan, India, South Korea, Indonesia, Malaysia, the Philippines, Myanmar and Thailand were all below the global average.

Among the two largest Asian economies, growth slowed to an eightmonth low in China and 11-month low in Japan.

Global manufacturing production and new orders both continued to increase in July, albeit at the weakest rates since September 2016.

Part of the slowdown in new business growth reflected a subdued picture for international trade flows.

The pace of increase in new export orders eased to near-stagnation and was the weakest during the current twoyear sequence of expansion.

New export business declined in the US, China, France, Russia, Indonesia, Brazil, and Austria.

A solid increase was signalled (on average) for the eurozone manufacturing sector.

Global manufacturing employment increased for the twentythird month running in July.

Among the largest industrial nations, staffing levels were raised in the euro area, the US and Japan, but reduced in China.

Meanwhile, price pressures continued to ease, with rates of inflation slowing for both output charges and input prices.