Global manufacturing production reached a near five-year high in May as clients purchased goods earlier to protect themselves against price increases and supply chain disruptions.
The J.P. Morgan Global Manufacturing PMI, compiled by J.P. Morgan and S&P Global Market, remained unchanged from April’s 52.6 rating, marking the 10th consecutive month that the index has stayed above the neutral 50.0 threshold.
The data indicate that the manufacturing economy is showing encouraging resilience, even as the war in the Middle East entered its third month in May. However, the report notes that much of this growth was driven by precautionary stockpiling.
“The J.P. Morgan global manufacturing output PMI ticked up 0.1-pt to 53.5, signalling the fastest rate of expansion since July 2021. Producers continue to cite a lift from precautionary demand, and indeed the finished goods inventories PMI continued its recent surge to a seven-month high,” said Maia Crook, global economist at J.P. Morgan.
All five key sub-components of the PMI – new orders, output, employment, suppliers’ delivery times, and stock purchases – remained at levels that typically indicate improving operating conditions.
While growth slowed down slightly in the consumer goods category, overall production increased across the consumer, intermediate, and investment goods sectors.
Notably, intermediate goods hit a 58-month high and investment goods reached a 53-month high.
On a regional level, manufacturing gains were widespread but varied in strength. Production growth in the United States reached its highest level in just over four years, while Japan recorded some of its strongest output gains since late 2021 over the course of the past two months.
Mainland China also posted a solid performance, marking one of its strongest growth periods in two years. In contrast, the economic upturn in the Eurozone was modest, while the rest of the Asian region maintained a steady and strong average of output growth throughout May.
The report attributed the recent growth in production volumes to a steady rise in incoming orders. Employment levels within the sector also saw a slight increase, bouncing back after consecutive workforce reductions in March and April.
