Global Economic Analysis and News of Note: Manufacturing Struggles Globally
- The J.P. Morgan global purchasing managers’ index (PMI) increased to 50.4 in June from 50.0 in May. While production, the rate of new orders, and employment improved, the bank noted, “The global manufacturing sector continued to hover around the point of stagnation in June, providing a subdued end to what was already a lackluster first half of the year.”
- According to Markit, “The recovery in the Eurozone manufacturing sector gathered momentum in June.” Readings for all individual countries, with the exception of France, rose last month. The Markit PMI for the Eurozone rose to 52.8 in June from 51.5 in May. Germany’s index was at a 28-month high, Austria’s at a 61-month high, and Greece’s at a 25-month high, but France’s reading fell to a two-month low. The Markit PMI for the United Kingdom also improved last month, rising to 52.1 in May from 50.4 in June. Production and new orders improved in the UK, but the employment situation deteriorated somewhat.
- Asian PMIs were decidedly mixed last month. According to Caixin, “Chinese manufacturers reported the sharpest deterioration in operating conditions for four months in June, with output falling at the quickest rate since February amid a further drop in new work.” China’s headline PMI fell to 48.6 in June from 49.2 in May. While Nikkei’s reading for Japan rose slightly last month, to 48.1 in June from 47.7 in May, the rates of production and new orders fell and the second quarter average reading was the lowest quarterly average since the last three months of 2012. The Nikkei reading for Vietnam fell slightly, to 52.6 from 52.7, even though output continued to improve. Nikkei’s reading for South Korea rose slightly as employment reached a 27-month high while Taiwan’s PMI rose to 50.5 in June from 48.5 in May. The Nikkei reading for India also improved, rising to 51.7 from 50.7, on news that production and the rate of new orders expanded.
- As a reminder, all PMI readings can be found here.
- In other economic news around the world: due to declines in chemicals, cosmetics, construction equipment, and semiconductor production, Japanese industrial output fell 2.3 percent in May to its lowest level in three years and, in the United Kingdom, production of cars increased 26 percent in May.