NAM: Global Manufacturing Economic Update
The J.P. Morgan Global Manufacturing PMI edged up from 55.9 in April to 56.0 in May, the fastest pace since April 2010. New orders and exports expanded at the strongest rates in 11 years, and manufacturers remained very upbeat in their outlook for production. Survey respondents also cited significant supply chain disruptions, with input prices rising the most since March 2011 and output prices soaring at a record pace.
For the fourth consecutive month, eight of the top nine markets for U.S.-manufactured goods had expanding manufacturing sectors. Manufacturing activity in Mexico remained challenged, but the Netherlands and the United Kingdom set new records for PMIs in May.
Encouragingly, the overall data—while mixed in May—continued to reflect significant progress in the economy over the past year, as the world begins to emerge from COVID-19-related weaknesses and even with lingering hot spots for the virus in some key markets.
After hitting an all-time high in March, the U.S. trade deficit pulled back somewhat in April, with goods exports rising to a new record. Growth in goods exports has outpaced the increase in goods imports year to date, reversing the trend seen since February 2020, where imports have recovered faster than exports.
In a sign that export trade is recovering after a rough 2020, U.S.-manufactured goods exports have risen 6.77% through the first four months of 2021 relative to the same period last year.
Manufacturers are working robustly with the Biden administration and Congress to open markets, ensure trade certainty and competitiveness and address challenges overseas, taking actions that include the following:
Raising concerns regarding the implementation of commercial commitments by Mexico and Canada under the United States–Mexico–Canada Agreement
Continuing to urge the Biden administration to rapidly develop and implement a strong, comprehensive China strategy
Sending a letter to Secretary of Health and Human Services Xavier Becerra that lays out priorities in advance of the World Health Assembly
Continuing to lead industry advocacy in support of expeditious congressional passage of a comprehensive Miscellaneous Tariff Bill