JPMorgan Global Manufacturing PMI falls for the second successive month

Source: ISM

Jun 23, 2011

At 55.0 in April, the JPMorgan Global Manufacturing PMI fell for the second successive month to its lowest level since last November. The headline PMI remained above the neutral 50.0 mark, signalling expansion, for the twenty-second successive month and was slightly above its average for that period.

Rates of expansion eased to sevenmonth lows for both manufacturing production and new orders in April.

International trade volumes increased for the twenty-second successive month in April. The rate of growth accelerated slightly and remained solid, but was below the average for this period. Developed market economies tended to record faster growth of new export orders than emerging nations.

Job creation was recorded for the seventeenth month running in April. The rate of increase remained historically high and close to February's survey peak. Moreover, rates of jobs growth during the past five months have been above any seen previously during the series history.

Average input costs continued to rise sharply in April, amid reports of high oil prices and increases in the cost of a wide range of commodities. Input price inflation was especially marked in the US, with the rate of increase hitting a near threeyear peak.

Inventories of purchases edged higher in April, following two successive months of decline. Among the largest nations covered by the survey, stocks rose in the US, Germany, France and India.

Supply disruption continued in April, with average vendor lead times lengthening to the second-sharpest extent in the survey history. Delivery times lengthened to the greatest degree in the developed markets, especially in Japan, the US and within Europe.

India and US led output ranking table in April. Japan saw further marked contraction.

Amongst the largest industrial regions covered by the survey, manufacturing production rose in the US, the Eurozone, China, the UK and India in April. Slower growth was seen in the US, the UK and China, but rates of expansion picked up in the Eurozone and India. Output continued to fall in Japan, with the pace of contraction the steepest in over two years. Growth of new business, meanwhile, slowed in the US, the Eurozone, the UK and India. China saw faster inflows of new work, whereas Japan reported a further steep contraction.

Within the euro area, growth of production was strongest in Germany, followed by France. These nations were also among those seeing an accelerated rate of expansion, the others being Ireland and the Netherlands. Domestic market strength alongside robust inflows of new export orders remained the main factor driving Germany and France to the top of the growth table. Although Italy saw a robust increase in output, growth of new orders slowed to its weakest so far in 2011. New order growth eased sharply in Austria, and slowed closer to stagnation in Spain. Greece reported a further decline in new orders.

International trade volumes increased for the twenty-second successive month in April. The rate of growth accelerated slightly and remained solid, but was below the average for this period. Developed market economies tended to record faster growth of new export orders than emerging nations. The rate of increase was especially marked in the US, where growth was close to February's 22-year peak.

Global manufacturing employment rose for the seventeenth successive month in April. Rates of jobs growth during the past five months have been above any seen previously in the series history. The US, Germany and the Czech Republic continued to record the steepest rates of increase. In contrast, Greece, Japan, Spain, Australia and South Africa reported job losses.

Input price inflation was especially marked in the US, with the rate of increase hitting a near three-year peak. Elsewhere, cost inflation generally eased. Rates of increase in the Eurozone and emerging markets were the slowest since December 2010 and last September respectively – but still well above their long-run averages.

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