The J.P. Morgan Global Manufacturing PMI contracted for the sixth straight month, albeit with some continued stabilization. The headline index inched up from 49.7 in September to 49.8 in October, continuing to improve from July’s reading (49.3), which was the lowest since October 2012.
For its part, the IHS Markit U.S. Manufacturing PMI improved to 51.3 in October, inching up for the second straight month after falling to 50.3 in August, its worst reading since September 2009. That survey offers some basis for cautious optimism that the market will shift in the right direction. With that said, a competing and perhaps more well-known survey, ISM® Manufacturing Purchasing Managers’ Index®, contracted for its third straight month in October.
Half of the top 12 markets for U.S.-manufactured goods experienced a contraction in manufacturing activity in their economies in October, representing slight progress from seven in September. Mexico expanded very slightly for the first time since April, led by stronger demand and employment. Encouragingly, the IHS Markit Emerging Markets Manufacturing PMI expanded for the fourth straight month, remaining at 51.0 in October.
Nonetheless, the worldwide IHS Markit PMIs continued to reflect ongoing weaknesses in the global economy. This was especially the case in Germany and Hong Kong, the two economies with the lowest PMI readings (42.1 and 39.3, respectively). As one might imagine, Hong Kong’s lowest reading since November 2008 was largely related to political unrest but also due to slowing global activity.
The IHS Markit Eurozone Manufacturing PMI improved slightly after falling to its lowest point in nearly seven years, up from 45.7 in September to 45.9 in October. Nonetheless, it contracted for the ninth straight month, highlighting ongoing challenges on the continent. Real GDP slowed to 1.1% year-over-year in the third quarter, the weakest pace since the fourth quarter of 2013.
The Caixin China General Manufacturing PMI surprisingly rebounded for the third month in a row to the strongest reading since February 2017. In contrast, the official manufacturing PMI data from the National Bureau of Statistics of China remained in negative territory for the sixth straight month, pulling back from 49.8 in September to 49.3 in October. Overall, real GDP grew 6.2% year-over-year in the second quarter, down from 6.4% in the first quarter. That was the slowest pace of growth in China since the first quarter of 1992, illustrating how much its economy has decelerated. For instance, industrial production rose 4.7% year-over-year in October, down from 5.8% in September.
In non-seasonally adjusted data, U.S.-manufactured goods exports totaled $845.19 billion through the first nine months of 2019, down 2.86% from $870.05 billion for the same period in 2018. This suggests that international demand for U.S.-manufactured goods has weakened in the first three quarters of this year after experiencing better data in both 2017 and 2018.
With less than 20 working days left in the current session of Congress, manufacturers are pressing for quick action on two key legislative trade priorities:
Passage of the U.S.-Mexico-Canada Agreement
Passage of a long-term and robust reauthorization of the U.S. Export-Import Bank
Manufacturers are also focused on other important trade issues, including:
Promoting concrete movement on U.S.–China bilateral trade agreement negotiations to correct market distortions, while also addressing challenging tariffs and retaliation
Participating in the next Miscellaneous Tariff Bill process to eliminate unnecessary border tariffs on manufacturers
Promoting a continuation of the World Trade Organization’s moratorium on taxes involving electronic commerce
Congressional action on sanctions
Ongoing activity involving India, the European Union and U.K.
top of page
Search
Recent Posts
See Allbottom of page
Comments