Global manufacturing output declined in May, according to the latest JP Morgan Global Manufacturing PMI survey, signalling a renewed contraction in factory activity amid weakening demand and falling export orders.
The headline PMI, compiled by JP Morgan and S&P Global Market Intelligence in collaboration with ISM and IFPSM, dropped to 49.6 in May from 49.8 in April – its lowest level in five months and the second consecutive reading below the 50.0 mark that separates expansion from contraction.
The survey data pointed to the first decline in manufacturing production in five months, with downturns recorded in the intermediate and investment goods sectors. Consumer goods production, however, continued to grow, extending its expansion streak to 22 consecutive months.
At a country level, India posted the strongest output growth among the 32 nations surveyed, while the eurozone’s manufacturing recovery continued for a third month. In contrast, output declined in major economies including China, the United States, Japan, and the United Kingdom.
“The J.P. Morgan global manufacturing output PMI continued its recent downward trend in May, falling back 1.4 points,” said Maia Crook, Global Economist at Judo Bank.
“At 49.1, the index sits at a level consistent with stagnation in global factory output, reinforcing that the recent front-loaded boom in global manufacturing is set to unwind.”
Incoming new business declined for the second straight month, with the pace of contraction accelerating. Global trade conditions also remained subdued, as new export orders fell again.
National PMI readings were mixed, with solid growth reported in the United States but ongoing contraction in China, Japan, and much of Europe.
“The move was more mixed beneath the surface, however, as a sharp drop in China’s output PMI contrasted with a broad move sideways in much of the developed markets,” Crook added.
The weakening demand environment contributed to a further decline in manufacturing employment, which fell for the tenth consecutive month.
Job losses were recorded across consumer, intermediate, and investment goods producers. While employment rose in the US, Japan, and India, it declined in China, the euro area, and the UK.
Despite the overall weakness in activity indicators such as output, orders, and employment, the outlook among manufacturers showed signs of improvement.
Business optimism picked up from April’s two-and-a-half-year low, with sentiment improving across all three major sub-sectors. Of the 32 countries surveyed, only six – India, Malaysia, Pakistan, Poland, Romania, and Russia – saw a drop in confidence.
“As we have expected, manufacturing confidence as measured by the future output PMI rebounded 3.1 points amidst the recent US-China tariff compromise,” Crook said. “Trade tensions remain a material drag, however, and where activity eventually settles after the front-loading unwinds in the second half of 2025 is a key uncertainty for the outlook.”
Cost pressures also showed signs of easing. Input costs and selling prices rose at their slowest pace in seven and four months, respectively.
Nevertheless, supply chain pressures persisted, with average vendor delivery times lengthening at the sharpest rate in six months despite softer demand for inputs.
