Global manufacturing saw production fall in 20 of the 30 economies for which data was available according to the JPMorgan Global Manufacturing Purchasing Managers’ Index™ (PMI™), compiled by S&P Global. The index fell from 51.1 in July to 50.3 in August, its lowest since June 2020. Production losses were meanwhile recorded in the United States, Eurozone, UK and Japan. Inflation fell however, with weakening demand and improving supply with pricing power shifting from sellers to buyers.
JPMorgan Global Manufacturing PMI™ in August 2022
- The GlobalPMI fell from 51.1 in July to 50.3 in August, its lowest since June 2020.
- Output only rose in ten of the 30 economies for which data are available, and in five of those including mainland China the gains were only marginal.
- Production losses were meanwhile recorded in the United States, Eurozone, UK and Japan.
- The survey’s sub-indices point to the production trend deteriorating in the coming months.
- New orders continued to fall at an increased rate in August, and inventory levels continued to rise amid weaker than anticipated sales.
- Weakening demand and improving supply led to a marked cooling of price pressures in the factory sector, with pricing power shifting from sellers to buyers.
Global factories set for steepening downturn
The global manufacturing PMI survey’s Output Index, which acts as a reliable advance indicator of actual worldwide output trends several months ahead of comparable official data (see chart 2), signaled a marginal drop in worldwide factory production in August, the third such decline seen over the past five months.
However, while modest at present, the downturn look set to gather momentum in the months ahead given marked deteriorations in other survey variables. Most importantly, the new orders to inventory ratio, a useful guide to near-term production trends, fell further in August, dropping to a level which, besides the initial pandemic lockdown months, was the lowest since April 2009, at the height of the global financial crisis.JPMorgan Global Manufacturing Purchasing Managers’ Index™ (PMI™)
About the Report
The Global Report on Manufacturing is compiled by IHS Markit based on the results of surveys covering over 13,500 purchasing executives in over 40 countries. Together these countries account for an estimated 98% of global manufacturing output2 . Questions are asked about real events and are not opinion based. Data are presented in the form of diffusion indices, where an index reading above 50.0 indicates an increase in the variable since the previous month and below 50.0 a decrease.
Source: S&P Global
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