Global manufacturing showing signs of recovery, says latest PMI report
The latest data has shown an improvement in global manufacturing so far this year after declining for almost one and a half years though inflationary and supply issues remain.
Last month (May) the J.P. Morgan Global Manufacturing PMI - a composite index produced by J.P.Morgan and S&P Global Market in association with ISM and IFPSM - rose to a 22-month high of 50.9 - remaining above the neutral 50.0 mark for the fourth successive month.
By country, signs of recovery in manufacturing were broad-based, with output growth accelerating in the US, China and the UK, while rates of contraction eased in Japan and the euro area.
The data showed that manufacturing output was growing worldwide at an annual rate of around 2% with an expansion in Asia accompanied by a re-acceleration of growth in the US to the third fastest seen over the past two years.
British businesses will be pleased to hear there was a revival of production growth in the UK to the sharpest for 25 months, while Eurozone manufacturing registered the smallest contraction in the past 14 months.
That said, global manufacturing input costs rose last month for sharpest rate for 15 months and although, at 54.8 the global input cost index continued to run well below the pre-pandemic decade average of 55.6, the data suggest that rising costs are likely to exert some upward pressure on selling prices in coming months.
Commentators said this suggested that the disinflationary spell from goods prices, which has helped bring inflation down since the pandemic was reversing.
The UK also saw last month some moderation of price pressures due to the fading impact of the higher minimum wage, which was introduced in April this year, the data showed.
In addition, the survey showed that overall, global supplier delivery times improved marginally for the fourth successive month in contrast to the short-lived delays seen at the start of the year due to the Red Sea shipping disruptions.
But the upswing in purchasing suggested that, if sustained, there may be some lengthening of supply chains in coming months based on past relationships between purchasing and supply chains.
