Start of Q2 2022 sees mild downturn in global manufacturing output

The April PMI surveys signalled a downturn in worldwide manufacturing production for the first time since June 2020.

The index is a composite one produced by J.P. Morgan and S&P Global in association with US-based Institute for Supply Management (ISM) and the International Federation of Purchasing and Supply Management (IFPSM).

Rising geopolitical tensions, supply chain disruptions and escalating inflationary pressures also weighed on new order intakes, as growth of new business eased to near-stagnation, J.P. Morgan and S&P Global said in a press release.

The global manufacturing output index dropped to 48.5 in April. The decline mainly reflected a steep contraction in mainland China, where escalating COVID restrictions were a major factor underlying the sharpest drop in production volumes for 26 months since February 2020.

The global manufacturing output index calculated excluding China posted 53.2, up from 53.1 in March, over 4 points higher than the index including China. Output growth improved to a nine-month high in the United States.

The slowdown in the euro area continued, with production rising only marginally and to the weakest extent during the current 22-month upturn. Japan and Brazil saw modest expansions, with rates of growth little-changed from March.

Output fell across the consumer, intermediate and investment goods industries, the first time all three have registered concurrent contractions since June 2020. The outlook also deteriorated, with business optimism dipping to a 19-month low.

New order growth slowed in the consumer and investment goods industries, while intermediate goods producers saw a decline for the first time since mid-2020.

Alongside subdued conditions in a number of domestic markets, declining inflows of new export business weighed on order books during April.

International trade decreased for the second straight month, with contractions seen in China, Germany, Japan and France. North America fared better, with new export order intakes rising in the United States, Canada and Mexico. India and Australia also registered growth.

Global manufacturing employment rose for the eighteenth month running in April, albeit at the slowest pace since January. Staffing levels were raised in the United States, the euro area, Japan, India and Brazil, but reduced in China.

Fibre2Fashion News Desk (DS)