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Global PMI posts lowest reading since October 2012

Christian Fernsby ▼ | June 4, 2019
Global PMI surveys signalled that manufacturing downshifted into contraction during May.
US manufacturing
World   Business conditions deteriorated to the greatest extent
Business conditions deteriorated to the greatest extent in over six-and-a-half years, as production volumes stagnated and new orders declined at the fastest pace since October 2012.

The trend in international trade continued to weigh on the sector, with new export business contracting for the ninth month running.

Business optimism fell for the second month in a row and to its lowest level since future activity data were first collected in July 2012.

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 49.8 in May, down from 50.4 in April, its lowest level since October 2012.

Later-than-usual release dates meant manufacturing PMI data for Colombia, Ireland and Thailand were not available to include in the May 2019 global readings.

Downturns continued in the intermediate and investment goods industries, which both saw output and new orders fall further during May.

Although the consumer goods sector fared better in comparison, with production and new business rising, rates of expansion eased.

National PMI data signalled deteriorating business conditions in several major industrial regions including the euro area, Japan, the UK, Canada, South Korea and Taiwan.

PMI readings for the US, China and Brazil were only a few ticks above the benchmark 50.0 no-change mark.

The downshift in growth in the US was the main driver of the slowdown in global manufacturing, as the US PMI slipped to its lowest level in almost a decade (September 2009).

The lacklustre performance in terms of output and new orders filtered through to the labour market during May.

Global manufacturing employment edged lower to register its first decline since August 2016.

Staffing levels were lowered in China, the euro area, the UK, Brazil, Taiwan, South Korea, Mexico, Australia, Russia, Poland, Turkey, Vietnam, the Philippines and the Czech Republic.

Part of the reduction in employment reflected a surplus of spare capacity, as highlighted by a further drop in backlogs of work.

Efforts to maintain competitiveness led to the weakest rise in selling prices since September 2016, while input costs rose at the slowest pace since August 2016.