Global Manufacturing PMI falls to 21-month low in April

J.P. Morgan has announced its Global Manufacturing PMI for April 2015. The PMI is a composite index measuring manufacturing output. The latest PMI surveys signalled a further growth slowdown in the global manufacturing sector, as rates of expansion in both production and new orders eased to the weakest since mid-2013.

Even at a 21-month low of 51.0 in April 2015, down from 51.7 in March, the J.P.Morgan Global Manufacturing PMI has now signalled expansion since December 2012. The slowdown was broad-based in nature. Rates of expansion in previous standout performers the US and the UK were at four and five month lows respectively, China stagnated and Japan, South Korea and Taiwan all contracted.

Growth in the Eurozone manufacturing sector held up comparatively well. Although the rate of expansion eased slightly over the month, it was still close to March’s ten-month high and above the global average for the second straight month.

Ireland, Italy, Germany and Spain all reported solid expansions in manufacturing output, while Austria returned to growth following a sequence of contraction. In contrast, the downturns in the French and Greek manufacturing sectors continued, with rates of contraction accelerating to the fastest since December 2014 and June 2013 respectively.

Global manufacturing new orders expanded at the weakest pace in almost two years during April. This partly reflected a near-stalling of growth in incoming new export business. New export orders decreased in the US, the UK, France, Canada, Taiwan, South Korea, Turkey, Indonesia, Brazil and Greece. China and Japan reported only minor rises.

April data signalled an increase in global manufacturing employment for the twenty-first successive month in April. However, the rate of job creation has remained, at best, only moderate.

Commenting on the survey, Joseph Lupton, Senior Economist at J.P.Morgan said, “The April PMI shows a loss of momentum in global factory output in April, with production and new orders both decelerating. Combined with a pickup in the finished goods inventory PMI, the April readings suggest the headwinds to global industry will continue further into this quarter. Our forecast looks for goods demand to bounce in the coming months, aiding in the apparent need for some inventory adjustment. Assuming this stronger demand picture is sustained, the weak performance of global manufacturing so far this year should hopefully improve towards mid-year.”

For more information and data on J.P. Morgan’s Global Manufacturing PMI please visit our tracking graph on the Ti Dashboard.