Global manufacturing index contracts since 2020 | So Good News


Global manufacturing contracted for the first time in two years in September as orders and production continued to weaken, highlighting the growing risks of a global recession.

(Bloomberg) — The JPMorgan global manufacturing purchasing managers’ gauge fell to 49.8 last month for the fourth consecutive month, according to data released Monday. The latest reading was below the 50-point reading and the lowest since June 2020.

An index of new orders fell for a third month to a more than two-year low, illustrating softening demand as international trade volumes slumped and central banks around the world raised interest rates. Production fell by the most in five months, the data showed.

About 90 central banks have raised interest rates this year, with about half going up at least 75 basis points at one time. Russia’s war in Ukraine, as well as rising energy costs over the past year due to limited global production capacity, have hit manufacturers particularly hard.

The report said the job backlog index for the third month was the lowest since July 2020. Against the backdrop of a slight expansion in finished goods inventories, the figure suggests some excess capacity in factories.

The euro area’s manufacturing sector slipped deeper into recession territory in September. Among the euro area countries observed, only Ireland indicated expansion. France and Germany showed the biggest declines in two years, the latest data from S&P Global showed.

Factory activity measures for both the US and China showed expansion in September, while the global index fell. The S&P global gauge of U.S. manufacturing rose to 52, while China’s official manufacturing purchasing managers’ index rose to 50.1 — nudging into expansion territory.

The good news from the latest global survey is that output growth eased for a fifth straight month, showing relief from inflationary pressures.

The JPMorgan Global PMI is a composite index produced in partnership with S&P Global and the Supply Management Institute and the International Federation of Purchasing and Supply Management.

©2022 Bloomberg LP


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