Global Manufacturing Sectors Struggle Amid Rising Trade Tensions
- The JP Morgan global purchasing managers’ index (PMI) fell to 52.2 in September, a 22-month low, as nations around the globe struggled to deal with increased trade tensions. The bank said, “September PMI data signaled a further growth slowdown in the global manufacturing sector, with rates of expansion in production and new order volumes both easing to two-year lows.”
- The IHS Markit reading for the Eurozone also fell, dropping to 53.2 in September from 54.6 in August. Readings for the continent’s two largest economies both declined, Germany’s to a 23-month low and France’s to a three-months low. The IHS Markit for the United Kingdom rose, however, increasing to 53.8 last month from 53.0 the month before. Readings for output and new order growth both improved in the UK.
- Asian PMIs were mixed last month, meanwhile. Caixin’s reading for China fell to 50.0 in September from 50.6 in August due to lower readings for output and employment. The Nikkei index for Japan was unchanged at 52.5 while Nikkei’s reading for South Korea improved substantially, rising to 51.3 last month from 49.9 in August due to improvements in employment and production. Taiwan’s index fell, as did the Nikkei ASEAN reading, which covers Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam and which dropped to 50.5 in September from 51.0 in August due to a decline in new orders. India’s PMI rose to 52.2 in September from 51.7 in August on news of stronger output and new orders. As a reminder, all PMI readings can be found here.
- In other economic news: the China Federation of Logistics and Purchasing’s monthly index of new export orders in the country fell to 48 in September from 49.4 as U.S. technology tariffs took hold; factory orders in Germany increased two percent between July and August following declines in both June and July.