Output, new orders drag down Global Manufacturing PMI in December

Image credit: JP Morgan

The global manufacturing sector experienced a further decline in December as a result of the downfall in output and new orders. 

The latest J.P. Morgan Global Manufacturing PMI fell to a 30-month low at 48.6 for the last month of 2022 and remained below the neutral mark of 50.0 for the fourth straight month. 

The current reading is the lowest since the first half of 2009, excluding the months impacted by the wake of the COVID-19 pandemic. 

The report, which is produced by J.P. Morgan and S&P Global, showed that the rate of decline in production moderated, but the level of new business fell at a sharper pace. 

The four largest industrial economies, which are mainland China, the United States, the euro area, and Japan, all had their output and new work indices standing in the contraction territory.

Global manufacturing production also slumped for the fifth consecutive month, while the demand trend fared worse, with new orders deteriorating at the quickest pace for over two-and-half years. 

New export business declined to one of the greatest extents since mid-2020. 

Meanwhile, seven out of the 29 countries for which December data were available saw expansion in market activity. These nations are India, Russia, Mexico, Colombia, Indonesia, the Philippines, and Australia. 

The US, UK, and Brazil were the largest nations ranking towards the lower reaches of the PMI league table. 

Employment has also seen a significant cut in the manufacturing industry for the second month running, although the rate of decline was moderated by gains in the US, euro area, and Japan. 

The report also found signs indicating that the outlook for production volumes may be stabilising as business optimism rose to a four-month high and the cyclically sensitive new orders-to-finished goods inventories ratio edged higher.