Economic Buzz: Global Manufacturing PMI Eases To Lowest Since October 2020

2 Feb 2022 , 01:23 PM

A slowing in the worldwide factory sector was signalled in January as the JPMorgan Global Manufacturing PMI fell from 54.3 in December to 53.2, its lowest since October 2020. The index was pulled lower by all five of its components, therefore indicating slower output, new orders, employment and inventory building growth during the month, as well as suppliers being less busy. The surveys output index fell to a greater extent than the headline PMI, reflecting a marked slowing in production growth to the lowest since the recovery began in July 2020. Rising COVID-19 infection numbers, linked to the Omicron variant, were widely reported as having disrupted factory activity. The slowdown was led by a renewed fall in China and a near-stalling of production in the US. In contrast, production growth accelerated in the eurozone, the UK and Japan. Production in the rest of Asia meanwhile slowed to the weakest since September, though continued to rise at solid rate. Similarly, new orders growth slowed to the weakest since July 2020, albeit moderating to a lesser extent than output. This divergence suggests that production once again lagged demand (having broadly come into line in December), though to a considerably lesser degree than seen throughout much of 2021.

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