Global manufacturing conditions showed signs of recovery in August, with output, new orders, and employment all returning to growth, according to the latest JP Morgan Global Manufacturing PMI.
The index, compiled by JP Morgan and S&P Global Market Intelligence in association with ISM and IFPSM, rose to 50.9 in August, up from 49.7 in July, signalling the first overall improvement in global manufacturing operating conditions since June.
JP Morgan said production increased for the second time in three months, with the pace of expansion reaching a 14-month high. Growth was recorded across consumer, intermediate, and investment goods, though gains were strongest in the consumer and investment goods categories.
“The J.P. Morgan global manufacturing output PMI rebounded 2.0 points in August, fully unwinding a July drop,” said Maia Crook, Global Economist at JP Morgan.
Out of 32 nations surveyed, only five reported lower output readings, while expansion rates strengthened in 11 countries. India, Thailand, Spain, Colombia, and the United States posted the fastest growth, whereas Poland, Taiwan, Russia, Kazakhstan, and Brazil saw the sharpest declines.
Manufacturing new orders rose for only the second time in the past five months, though JP Morgan noted that trade flows remained subdued as export orders fell for the fifth month running.
“The index has been volatile in recent months, but at 51.7 the PMI challenges our forecast for a stall in global factory output in the second half of the year,” Crook said.
The report showed that global manufacturing employment increased for the first time in 14 months, though the rise was modest and partly offset by job losses in consumer goods.
Backlogs of work also eased, suggesting factory capacity was better aligned with demand.
Price pressures continued to build, with input costs and selling prices rising at their fastest pace in several months.
Inflationary pressure was most pronounced in the United States, which saw the steepest increase in output charges and one of the highest jumps in input costs.
Crook cautioned that despite the improvement, challenges remain for the global manufacturing sector. “Forward-looking indicators are more downbeat,” she said.
“Both the future output and new orders PMIs remain depressed despite ticking up last month, and a surge in the finished goods inventory PMI suggests much of the recent rebound is going into stockbuilding rather than final sales. We continue to see building industry headwinds stemming from U.S. tariffs.”
