The global manufacturing sector began seeing signs of stabilisation at the start of 2024 as output climbed higher and the decline in new orders eased up.
The latest JP Morgan Global Manufacturing PMI, a composite index produced by JP Morgan and S&P Global, climbed to 50.0 in January, indicating no changes in operating conditions over the month.
The latest result marks the end of the global manufacturing PMI’s 16-month sequence below the neutral 50.0 mark.
The report revealed that only two of the five PMI components, output and vendor lead times, were consistent with an outright improvement in operating conditions, while the others all experienced contractions.
Movements in all five sub-index levels positively affected the level of the PMI as rates of contraction in new orders, employment, and stocks of purchases all slowed.
Consumer goods manufacturers upped their production rate while this remained unchanged in the intermediate goods category. On the other hand, the investment goods sector saw a slip in its production.
Output rose in China, India, and Brazil, among others, and fell more slowly in the United States, Japan, and the euro area.
Employment fell in the global manufacturing sector for the fifth consecutive month in January, albeit at a slower phase as job losses eased up to a four-month low.
Staffing levels rose in the US and Brazil, among others, but fell in China, the euro area, Japan, and India.
There remained sufficient capacity at the global level to achieve reductions to backlogs of work, with work-in-hand volumes falling for the 19th month in a row.
Export rates have declined for 23 consecutive months, although January recorded the weakest contraction since June 2022.
Among the largest exporting regions covered by the survey, new export orders rose in China, while the euro area and Japan saw an easing up in their respective contraction rates.
“In contrast, new export work fell at the quickest pace in three months in the US. The PMI subcomponents tracking new orders, future activity and employment also made advances, further raising optimism that fuller recovery could be established during the coming months. The impact of disruptions to Red Sea shipping routes on delivery delays and prices seems minimal thus far, at least at the global level,” said Bennett Parrish, global economist at JP Morgan.
