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September 10, 2018

Global Manufacturing Readings Mixed In August

 

  • According to American Metal Market (AMM, subscription required), major Chinese steel mills cut crude steel output rates by two percent in mid-August, but finished steel inventories continued to rise, increasing three percent.
  • The J.P. Morgan Global Manufacturing purchasing managers’ index (PMI) fell to a 21-month low of 52.5 in August, down from 52.8 in July. David Hensley, Director of Global Economic Coordination at J.P. Morgan, said, “August PMI data signaled a slight firming in global manufacturing output growth to a solid pace at near three percent annualized.”
  • Manufacturing readings in Europe were softer last month. The IHS Markit PMI for the Eurozone fell to at 54.6 in August from 55.1 in July. That report indicated firmer output growth, but also indicated new orders rose at the slowest rate in two years and concerns about tariffs and global trade are weighing on manufacturers’ confidence. The IHS Markit index for the United Kingdom also declined, dropping to a 25-month low of 52.8 in August as job creation slowed to near-stagnation and business optimism dipped to 22-month low.
  • In Asia, news about the manufacturing sector was mixed. The Caixin PMI for China felt to 50.6 in August from 50.8 in July as new orders rose at the slowest rate since May 2017 and export sales declined for the fifth month in a row. South Korea’s index improved, but business conditions failed to improve for sixth month in a row and new orders and employment rose only at fractional rates. Japan’s index increased slightly, but readings in India and Taiwan were off. The Nikkei ASEAN PMI, which covers Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, rose from 50.4 in July to 51.0 in August, signaling a marginal improvement in the health of the sector.
  • As a reminder, all PMI readings can be found here.