Fra Markit PMI Global Mnufacturing
The rate of expansion in the global manufacturing sector remained moderate during September. This was highlighted by the J.P.Morgan Global Manufacturing PMI™ – a composite index1 produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – posting 51.0, up slightly from 50.8 in August.
The average reading of the headline PMI over the third quarter as a whole (50.9) was the highest since the fourth quarter of 2015, but remained below its long-run survey average (51.3). By sector, accelerated expansions were signalled at both consumer and intermediate goods producers.
In contrast, a minor contraction was experienced in the investment goods sector. September PMI data pointed to subdued growth in the US and Asia. The US PMI dipped to a three-month low, while readings for China and Japan moved only slightly back above the stagnation mark of 50.0. Downturns continued in France, South Korea, Turkey, Malaysia, Thailand, Myanmar and Brazil.
Conditions in Europe were slightly brighter in comparison. Faster expansion was signalled (on average) in the euro area, led by solid improvements in Germany, Austria and the Netherlands. The UK saw its rate of expansion accelerate to a 27-month high, while growth also picked up in the Czech Republic, Poland and Russia. Global manufacturing production rose for the fourth successive month in September, underpinned by a further increase in new business.
Output growth was a tick slower than in the prior month, whereas inflows of new work rose at a marginally quicker (yet still subdued) pace. Part of the reason for the ongoing below long-run average expansions in new work and production was the continued lacklustre trend in international trade volumes.
Although new export business rose for the third month running, the rate of increase was only mild (albeit slightly quicker than in August). September saw global manufacturing employment expand for the second time in the past three months – albeit only marginally. Jobs growth was seen in the US, the euro area, Japan, the UK, Taiwan, India, Indonesia, Vietnam, Commenting on the survey, David Hensley, Director of Global Economic Coordination at J.P.Morgan, said:
“The September PMIs signal that the global manufacturing sector remained in a low growth gear at the end of the third quarter, though the survey has registered some improvement in recent months. Based on the global PMI, it appears that global output growth is firming modestly from a 1% pace to a 2% pace. The consumer goods PMI remains quite elevated, consistent with good gains in retail sales, whereas the investment goods PMI is sending a message that capex growth remains slow.”
