Global manufacturing growth hits 4-year high in April: JP Morgan

The growth was broad-based across sectors, including consumer, intermediate and investment goods, with manufacturing production expanding for the ninth straight month at a near 5-year high. Among major economies, output growth accelerated in mainland China, the US, the euro area and Japan, S&P Global said in a press release.

The upturn in production was supported by stronger inflows of new business, although part of the demand reflected front-loaded orders as firms sought to mitigate expected supply chain disruptions and rising costs.             

Supply-side pressures intensified during the month, with vendor delivery times lengthening at the fastest pace since August 2022, largely due to disruptions linked to geopolitical tensions in the Middle East. This led to input shortages and pushed input cost inflation to its highest level since June 2022, among the steepest increases recorded in the survey’s history.

Manufacturers responded by raising output prices at the quickest rate in 45 months, passing on part of the cost burden to customers. Backlogs of work increased for the third consecutive month, indicating sustained pressure on production capacity.

However, employment declined slightly for the second month in a row, suggesting caution among manufacturers despite improving output trends. Business confidence remained subdued, holding at March’s five-month low amid ongoing geopolitical uncertainty.

Commenting on the data, Alex Gallin, global economist at JP Morgan, said: “The JP Morgan Global manufacturing output PMI rebounded 1.9 points to 53.4 in April, a level consistent with solid growth in global industry. Caution is still warranted as some manufacturers front-load production ahead of growing supply chain disruptions; supplier delivery times and the pricing indexes surged to multi-year highs.”

He added: “Meanwhile, the future output PMI was stable after falling sharply in March as elevated geopolitical uncertainty continues to depress business sentiment.”

Fibre2Fashion News Desk (SG)