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Global manufacturing PMI at nine-month low in May

Staff Writer | June 4, 2018
May PMI data indicated that global manufacturing production rose at the same pace as March’s eight-month low.
Global manufacturing
World   The best performing sub-sector was investment goods in May
The main constraint on achieving faster output growth was a moderation in the pace of expansion of new business to the lowest since June 2017.

A further factor was a slowdown in growth of new export orders to near-stagnation.

The J.P.Morgan Global Manufacturing PMI – a composite index produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – posted a nine-month low of 53.1 in May, down from 53.5 in April.

The average reading so far in quarter two (53.3) is indicative of a mild growth deceleration compared to the opening quarter (54.0).

Please note that due to later than usual release dates the PMI data for Indonesia and Malaysia manufacturing were not available for inclusion in the May 2018 global PMI numbers.

The best performing sub-sector was investment goods in May.

This was the only industry covered to see an improved PMI level – to a five-month high – and faster growth of both output and new orders.

In contrast, the PMI readings for the consumer and intermediate goods categories fell to two- and 11-month lows respectively, as both sectors saw rates of expansion in production and new work ease.

The regional breakdown of the latest results showed that the US outperformed the euro area for the second straight month.

The former is currently enjoying one of its best growth spells during the past four years so far in the second quarter.

The eurozone is still achieving a relatively solid pace of expansion, although the upturn has waned since the turn of the year and is currently the slowest for 15 months.

Growth eased to a seven-month low in Japan and an 11- month low in Taiwan during May.

The China PMI also remained at a subdued level (albeit still above 50.0) and the downturn in South Korea also continued.

The Russia PMI signalled contraction for the first time in 22 months, while the upturn in Brazil slowed to near-stagnation.

Global manufacturing employment increased at the weakest pace for ten months in May.

Job creation was registered in the majority of the nations covered, the exceptions being cuts in China, South Korea, Russia, Turkey and Thailand.

Price pressures intensified in May, with rates of increase in input costs and output charges strengthening for the second successive month.

Inflation of both measures is (on average) faster in developed nations than emerging markets.