Global manufacturing continued its upturn in June, although input cost inflation accelerated to a 16-month high, according to the latest JP Morgan Global Manufacturing PMI.
The composite index, produced by JP Morgan and S&P Global Market Intelligence in collaboration with ISM and IFPSM, posted 50.9, down slightly from May’s 51.0.
The PMI has remained above the neutral 50.0 mark, signalling improved operating conditions for five consecutive months.
Four out of the five PMI sub-indices indicated expansion in June, with output, new orders, and employment all rising, while suppliers’ delivery times lengthened. However, stocks of purchases saw a slight decrease for the fourth month in a row.
Global manufacturing production’s growth rate remained close to May’s near two-and-a-half-year high in June, with output increasing for the sixth consecutive month.
Consumer and intermediate goods industries experienced upturns, while the investment goods category saw production fall for the second time in three months.
Of the 30 nations for which June PMI data were available, 18 reported an increase in output.
Asia performed well, with 10 nations, including India, Vietnam, and Thailand, showing growth, while China and Japan had lesser rates of expansion.
The euro area, however, remained a weak spot, with output falling for the fifteenth consecutive month.
Growth in Spain, the Netherlands, and Greece was offset by contractions in Germany, France, and Italy. Upturns in the US, the UK, and Brazil continued into June.
Rising intakes of new work underpinned the latest increase in global manufacturing production.
Incoming new business rose for the fifth month in a row, although the rate of expansion remained modest and slowed slightly from the previous month.
International trade flows deteriorated, with the volume of new export orders falling for the first time in three months. Subdued market conditions contributed to a dip in manufacturers’ business optimism, reaching an eight-month low.
Manufacturing employment rose for the third time in four months in June, achieving the quickest pace since August 2023.
Job creation was registered in larger industrial nations such as the US, Japan, India, and Brazil.
Input buying activity rose slightly, while stocks of both purchases and finished goods fell. Supply chain pressures remained relatively muted at the end of the second quarter, with average vendor lead times lengthening only marginally despite ongoing disruptions in the Red Sea and Panama Canal.
Measured overall, worldwide manufacturing input costs rose at the steepest rate in 16 months in June. These rising costs pushed up factory gate selling prices, which increased at the sharpest pace since March 2023.
Rates of increase in both price measures remained stronger in developed nations compared to emerging markets.
