JP Morgan reports weakening of global manufacturing due to slower trade

According to the latest JP Morgan Global Manufacturing PMI, the war in the Middle East has been testing the resilience of the global manufacturing sector. The report says that growth of output and new orders slowed as global trade flows near-stagnated, while input costs surged and supply chains became increasingly stretched.

The JP Morgan Global Manufacturing PMI posted 51.3 in March, down from February’s 44-month high of 51.8, but still the second-highest reading since June 2022. The PMI has remained above its neutral 50.0 mark for eight successive months.

Growth of manufacturing production eased to a three-month low in March. Output growth slowed across the consumer, intermediate and investment goods sub-sectors.

Of the 33 nations for which March data were available, 12 saw outright contractions of production volumes (Australia, Brazil, Canada, France, Indonesia, Kazakhstan, Mexico, Romania, Russia, Spain, Türkiye and the UK), while 19 registered a lower PMI Output Index reading than in February. The steepest downturns were seen in Kazakhstan, Romania, Mexico, Russia and Türkiye. When compared to February Output Index readings, performances worsened to the greatest extent in Indonesia, Vietnam, India and the Philippines.

The four largest industrial regions (mainland China, the US, the euro area and Japan) saw output continue to rise in March. The US and eurozone bucked the global trend by seeing mild growth accelerations. Mainland China and Japan saw rates of output expansion ease from February’s recent highs.

The reports said that business confidence about the outlook for the year ahead slipped to a five-month low amid rising cost pressures and greater stresses on supply chains. Input price inflation accelerated to its highest level since July 2022, while suppliers’ lead times lengthened to the greatest extent in almost three-and-a-half years.

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