Global Economic Analysis and News of Note: Brexit Hits UK Manufacturing Hard
- The JP Morgan global purchasing managers’ index increased to 51.0 in July from 50.4 in June. Readings for output, new orders, and employment all improved. JP Morgan Director of Global Economic Coordination David Hensley said, “The global manufacturing sector started the second half of the year on a more positive footing. Growth of output and new orders both accelerated in July, a sign that the sector is breaking out of the sluggish trend seen through the opening two quarters.”
- The Eurozone PMI fell to 52.0 in July from 52.8 the previous month due to the fact that the rate of new orders slowed. Despite the disappointing reading for the broader Eurozone, the manufacturing industries in Germany, Austria, and the Netherlands all expanded at record rates. The United Kingdom’s Markit index, meanwhile, plunged to 48.2 from 52.4. The rate of new orders and production both slowed and the UK’s domestic market also was hit by Brexit referendum uncertainty, Markit said.
- Readings in Asia were mixed last month. The Caixin PMI for China rose to 50.6 from 48.6. The rate of production and new orders quickened in China in July, but employment slowed at a significant pace. In India, readings for new orders and output were at their highest in four months, leading to a slight uptick in the nation’s PMI, from 51.7 to 51.8. South Korea’s Nikkei index fell to 50.1 from 50.5 on news that production and the rate of new orders slowed. Taiwan’s reading rose from 50.5 to 51.0 due to the fact that the rate of new orders increased for the first time in four months. Finally, a rise in output, new orders, and employment couldn’t stop Vietnam’s PMI from declining to 51.9 in July from 52.6 in June.
- As a reminder, all PMI readings can be found here.