THE JPMorgan global manufacturing purchasing managers gauge fell for a fourth consecutive month, to 49.8 last month, according to data released Monday (Oct 3). Readings below 50 signal contraction, and the latest figure is the lowest since June 2020.
An index of new orders shrank for a third-straight month to a more-than-two-year low, and a measure of international trade fell, illustrating softer demand as central bankers around the world ratchet up interest rates to fight inflation. Production also shrank by the most in five months, the data showed, The Business Times cited.
Around 90 central banks have raised interest rates this year, and half of them have hiked by at least 75 basis points in one shot. Energy costs that have soared over the past year, due to Russia’s war in Ukraine as well as limited global production capacity, have hit manufacturers especially hard.
The report also showed the index of backlogs of work contacted for third month and is the lowest since July 2020. Against a backdrop of a slight expansion in stocks of finished goods, the figure points to some build-up of excess capacity at factories.
The euro area’s manufacturing sector fell deeper into contraction territory in September. Only Ireland, among monitored euro area countries, indicated expansion. France and Germany – the two largest euro zone economies – showed the biggest contraction in more than two years, the latest S&P Global data showed.
While the global index fell, factory activity gauges for both the US and China showed expansion in September. The S&P Global measure of US manufacturing improved to 52, while China’s official manufacturing purchasing managers index rose to 50.1 – barely into expansion territory.
