Global manufacturing conditions deteriorated in April, marking the first contraction in four months, according to the latest JP Morgan Global Manufacturing Purchasing Managers’ Index (PMI).
The composite index, compiled by JP Morgan and S&P Global Market Intelligence in collaboration with the Institute for Supply Management (ISM) and the International Federation of Purchasing and Supply Management (IFPSM), slipped to 49.8 from 50.3 in March.
A reading below 50 indicates a contraction in the manufacturing sector.
JP Morgan said the marginal decline signalled potential underlying weakness, with global trade conditions worsening, new orders declining, and business confidence falling to its lowest level since October 2022.
Three of the five PMI components – new orders, employment, and stocks of purchases – Signalled contraction. In contrast, output and supplier delivery times pointed to slightly improved performance.
While production rose for the fourth consecutive month, the rate of growth remained modest. Slight increases in output were reported in the consumer and intermediate goods sectors, with production at investment goods firms unchanged from March.
Countries such as India, Ireland, and the Philippines recorded the strongest expansions, while growth was also noted in China and the euro area. However, manufacturing activity contracted in major economies including the United States and Japan.
Global new business declined in April, ending a four-month streak of expansion. Export orders experienced their sharpest downturn since August 2023, with significant declines across all key manufacturing segments.
Of the 28 countries with available data, only Germany, India, and Greece saw an increase in new export orders. North American markets were particularly affected, with the US, Canada, and Mexico all reporting marked decreases. The UK experienced the steepest overall drop in new export business.
JP Morgan noted that manufacturing sentiment took a sharp hit, with business optimism dropping to a two-and-a-half-year low. Companies cited growing concerns over tariffs and rising protectionism, which they believe are affecting order volumes, supply chain stability, and pricing strategies.
The bank highlighted that global sentiment is now approaching levels last seen in 2019, a period also characterised by escalating trade tensions.
Manufacturing employment declined for the ninth consecutive month in April, with the pace of job losses the fastest since January. Reductions were observed in several key markets, including China, the US, the euro area, and the UK.
Rising input costs contributed to the cutbacks, with average purchase prices showing another solid increase.
Meanwhile, output charge inflation rose to a 25-month high, indicating sustained pressure on margins.
