Global manufacturing activity falls again

Global factory output fell last month due to slowing demand and the Covid-19 lockdowns in China, but the slowdown eased in Europe, surveys showed.

“Global consumers are reining in spending on discretionary goods in today’s world of stagflation,” said Duncan Wrigley, an economist at Pantheon Macroeconomics.

In the United States, manufacturing activity contracted for the first time in two and a half years, as higher borrowing costs weighed on demand for goods.

The Institute for Supply Management (ISM) reported that its manufacturing Purchasing Managers’ Index (PMI) fell to 49 points last month, below the 50 mark for activity growth. It is the first contraction since May 2020, when the economy suffered from the first wave of the pandemic.

On the other hand, while surveys indicated that euro zone factories still face a harsh winter, it may not be as bad as feared as there are signs that rampant inflationary pressures are easing.

The S&P Global manufacturing PMI for the euro zone rose to 47.1 from 46.4 in October.

“Today’s data confirms that manufacturing is heading towards a winter recession but suggests that the outlook for the sector is beginning to improve slightly,” said Riccardo Marcelli Fabiani, an economist at Oxford Economics.

In the United Kingdom, manufacturing activity barely went from 46.2 to 46.5 points, so it remained in contraction.

Asia in trouble

The results highlighted the bleak outlook for Asia in 2023 as China’s lockdowns disrupt international supplies and raise fears of a further downturn in its economy.

China’s Caixin/S&P Global Manufacturing PMI stood at 49.4 in November, up from 49.2 the previous month. It has been under 50 for four consecutive months.

Manufacturing activity also contracted in developed economies such as Japan and South Korea (both at 49 points) and emerging economies such as Vietnam (47.4 points), highlighting the growing damage caused by weak global demand and input costs. , which are persistently high.