Global manufacturing output and new orders have shown slower contraction in the first month of 2023, resulting in a 49.1 PMI score in January, up from December’s 48.7 rating.
According to the latest composite index unveiled by J.P. Morgan and S&P Global, the Global Manufacturing PMI remained below the 50.0 mark that separates contraction from expansion but rose from 48.7 to signal a slower rate of decrease.
The output index, which serves as the advance indicator of global factory production trends, indicated a second successive month of slower decline. The index reached its highest since August 2022, indicating that the global manufacturing downturn reached its nadir in November.
Only nine out of the 31 nations for which January’s PMI data were available reported expansions in output. These countries were largely confined to Asia, with India, Indonesia, Russia, the Philippines, Thailand, and Myanmar all reporting increases.
Meanwhile, Italy, the Netherlands, and Canada were the remaining nations outside of Asia to see production rise.
Production downturn also eased, with China, the United States, the euro area, and Japan all seeing slower decrease rates. A similar situation was also seen in the United Kingdom, Brazil, and Turkey.
According to the Global Manufacturing PMI result, data broken down by sector indicated that the downturn was centred on the intermediate and investment goods and industries.
Meanwhile, consumer goods production increased for the second consecutive month.
“The manufacturing PMI output and new orders indices both moved higher in January, raising hopes that the downturn in global industry reached its nadir before the turn of the year,” said Bennett Parrish, global economist at J.P. Morgan.
“Rising business optimism, an improved orders-to-inventory ratio and a boost to growth as China re-opens should also provide a boost in the months ahead. The slight upticks in the price indices are of limited concern in the near term, staying well below earlier peaks and are likely to resume their easing trends as supply chain constraints ease,” Parrish added.
