The United States, Japan, China, Germany, United Kingdom, France, Italy, Brazil, South Korea, and Spain continue in manufacturing contractions, which resulted in a deepening plunge of the Global Manufacturing PMI for July 2012. These are 10 of the top 12 manufacturing countries and represent 69.6% of the Global PMI. The other 2, India and Canada, continue expanding in the manufacturing sector. The Eurozone PMI in aggregate is also in contraction.
In addition, “Job losses were reported for the first time since November 2009. With demand still weak and a sharp drop in backlogs suggesting spare capacity is still available, staffing levels could fall further in coming months”.
JPMorgan Global Manufacturing PMI The current reading of 48.4 (-0.7) indicates a global manufacturing slowdown at a faster rate. The PMI latest peak was 57.4 in February 2011. The post-recession high has been 57.7 in April 2010. The post-recession low had been 49.7 in November 2011 before this latest contraction. Historical back data has been slightly revised, only the latest 8 months of revisions are reflected on chart. The general trend is not affected by the revisions.
David Hensley, Director of Global Economics Coordination at JPMorgan, said, “Weak demand and the ongoing period of inventory adjustment pushed the global manufacturing sector into deeper contraction at the start of Q3 2012. Job losses were also recorded for the first time in over two-and-a-half years. Recent cost reductions are providing some respite, but this will be of little long-term benefit if underlying demand fails to pick up.”