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Manufacturing PMI slumps to lowest level since financial crisis

Christian Fernsby ▼ | May 5, 2020
The economic disruption resulting from the outbreak of coronavirus disease 2019 (COVID-19) continued to hit global industry hard during April.
PMI   Factory
Rates of contraction in output and new orders were among the steepest registered in the 22-year survey history and the worst since the global financial crisis of 2008/09.

Business confidence took a severe knock, falling to a fresh record-low.

The cyclically-sensitive new orders-toinventory ratio also fell to its lowest ever level.

The J.P.Morgan Global Manufacturing PMI fell to 39.8 in April, its lowest level since March 2009.

The downturn in the headline index was softened by the recent relative resilience of the Mainland China PMI.

The Global Excluding Mainland China PMI reading was 35.8, down from 46.2 in March.

Please note that due to a later release date, final numbers for the Thailand Manufacturing PMI were not available to include in the Global PMI calculation.

Manufacturing production and new orders suffered similarly steep contractions during April, with rates of reduction the third and fourth sharpest in the survey history respectively.

International trade flows also ground to a sudden halt, with new export order intakes falling to the greatest extent on PMI record.

New Export Orders indices fell to record lows in almost all nations, the exceptions being Japan, China and Taiwan (which still signalled declines nonetheless).

The vast majority of the nations covered saw their output and new orders indices drop to series lows.

This included all of the countries included in the eurozone PMI (Germany, France, Italy, Spain, the Netherlands, Austria, Ireland, and Greece), the UK, Poland, Russia, Czech Republic, Canada, Mexico, India, Turkey, Indonesia, Vietnam, Malaysia, the Philippines, Australia, Brazil, Colombia, Myanmar and Kazakhstan.

Other nations tended to see near-record reductions, including the US, Japan and South Korea.

The main exception was China, which was the only nation to see a slight increase in production and by far the weakest decrease in new order intakes.

If China data are excluded from the global index calculations for output and new orders the readings would be the lowest and second-lowest on record, respectively Global manufacturing employment fell at the quickest pace in almost 11 years in April.

All of the nations covered saw staffing levels decline, with almost all also seeing accelerated job losses.

This included 13 countries registering a surveyrecord drop in workforce numbers (including the UK, India, South Korea, Canada, Mexico, Australia, Malaysia, Vietnam and Indonesia).

April saw both input costs and selling prices fall.

The rate of decline in output charges was the steepest in the series history.

COVID-19 caused massive disruption to global supply chains, with average vendor delivery delays the steepest in the 22-year survey history.