The industry loses momentum due to the fall in global demand
Despite weakening price pressures on intermediate products in many major economies, the Purchasing Managers’ Index (PMI), which signaled contraction in the manufacturing sector last month, shows that the global manufacturing sector has lost momentum. with the decrease in demand.
In the global manufacturing sector, a contraction was recorded in many countries in June as the demand environment worsened.
Global manufacturing PMI (JPMorgan) data released by S&P Global fell to 48.8 from 49.6 in June, falling to a 6-month low.
The PMI data, where a score above 50 points for sector growth and below 50 points for contraction, showed a sharp deterioration in business conditions.
Notably, factory output, which increased in the February-May period due to the easing of supply chain restrictions and the lifting of Kovid-19 restrictions in China, declined in June. Factory new order intakes also declined for 2 months in a row.
INTENSIVE DEMAND REDUCTION
The manufacturing sector, which had grown at the start of the year thanks in large part to improving supply chains, began to decline again in June as new orders gradually eased.
As pessimism about the economic outlook intensified, factories around the world reduced their purchases of inputs and focused on reducing inventories, compounding the drop in demand.
According to the latest PMI data from S&P Global, global manufacturing production ushered in a new decline in global goods production after a moderate recovery in production in the first 5 months of the year.
Analysts noted that rising interest rates affected household demand and business investment, noting that forward-looking indicators show risks are mainly to the downside in the coming months.
Saying that market uncertainty, increased competition and rising costs make customers more reluctant to commit to spending, analysts said industrial companies in many countries are being hit by weak market conditions. domestic and export market.
THE CONTRACTION IN THE EURO REGION COMES TOGETHER
According to the Global Manufacturing PMI (JPMorgan), only 10 of 29 countries saw output growth in June. It should be noted that 7 of the countries with an increase were in Asia. The data showed that production fell in the intermediate and capital goods sectors and stagnated in the consumer goods sector.
While the sharp drop in production was highlighted in the Euro Zone, manufacturing in the US, Canada, England and Japan, which are among the world’s largest economies, declined significantly.
The countries with the greatest contraction in the manufacturing sector were Austria, Germany and the Czech Republic.
The eurozone manufacturing PMI fell from 44.8 to 43.4 in June, indicating the sharpest deterioration in the eurozone manufacturing sector since May 2020, according to data from S&P Global.
In the same period, the US manufacturing PMI decreased from 48.4 to 46.3, registering the lowest level in 6 months.
In China, on the other hand, recently revived growth was seen to lose momentum. China’s manufacturing PMI data showed growth in the manufacturing sector continued, though it fell to 50.5 in June. (AA)