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Global Manufacturing PMI in July: End of 4th Consecutive Month of Decline

On August 6, the China Federation of Logistics and Purchasing released data showing that the global manufacturing PMI (purchasing managers index) in July was 47.9%, an increase of 0.1 percentage points from the previous month, ending the trend of four consecutive months of month-on-month decline.

Qi Zhengyan, an analyst at the China Logistics Information Center, told a reporter from the Securities Daily that the PMI has remained at a low level below 48% for two consecutive months, indicating that the current downward trend of the global economy has not changed. On the whole, the overall recovery speed of the global manufacturing industry is still relatively slow at present, and there are obvious differences among regions. The steady growth of the Asian region will form a good support for the recovery of the global manufacturing industry, but the continued weakness of the manufacturing industry in Europe and the United States may make the global The manufacturing industry is facing greater downward pressure.

“The decline in core inflation in developed economies is still relatively slow, their monetary policies remain tight, and the uncertainty in the financial market environment has increased. These factors continue to drag down the pace of global economic recovery.” Qi Zhengyan said that the recent IMF (International Monetary Fund) The IMF’s forecast for global economic growth this year is still low. In the latest “World Economic Outlook”, the IMF predicts that the global economy will grow by 3% in 2023.

Data show that in July, the Asian manufacturing PMI was 50.5%, an increase of 0.1 percentage points from the previous month, and it was above 50% for seven consecutive months, showing that the Asian manufacturing industry continued to maintain a steady growth trend.

From the perspective of major countries, China’s manufacturing PMI has risen steadily for two consecutive months, and the economy is stabilizing and operating well; India’s manufacturing industry has slowed down slightly, but still maintains a relatively high growth rate; the decline in South Korea and Vietnam’s manufacturing industry has narrowed. Although the PMI is still below 50%, it has rebounded significantly from the previous month; Japan’s manufacturing industry has maintained a contraction trend, and the PMI has dropped slightly from the previous month, and is still below 50%.

“At present, the manufacturing industry in Asia shows a continuous and steady growth trend, showing strong resilience compared with other regions. The main reason is that China’s manufacturing industry has stabilized and continued to play the role of an engine driving economic growth in Asia. The continued high-speed growth of India’s manufacturing industry has also contributed to the growth of the Asian economy. The Asian economy has formed a good support.” Qi Zhengyan said that as China’s macro-control policies continue to increase, China’s manufacturing industry is expected to rebound in the second half of the year, providing momentum for global manufacturing growth. In its latest outlook, the IMF also maintained its forecast for China’s economic growth rate, which is expected to grow by 5.2% and 4.5% this year and next, respectively.

In July, the European manufacturing PMI was 44.8%, a decrease of 0.6 percentage points from the previous month, a month-on-month decline for six consecutive months, and below 50% for 12 consecutive months. The manufacturing PMI in the Americas was 47%, an increase of 0.5 percentage points from the previous month, running below 50% for 9 consecutive months, showing that the manufacturing industry in the Americas as a whole continued to run weakly.

Qi Zhengyan believes that the current inflationary pressure in Europe is still high, and the continuous rate hikes have not significantly eased core inflation. It is expected that Europe will continue to be in a high interest rate environment.

The ISM (Institute for Supply Management) report shows that although the U.S. manufacturing PMI has increased from the previous month, it is still at a low level below 47%.

“Currently, US inflation has eased to a certain extent, CPI (consumer price index) and core CPI have both cooled down, but the direction of the Fed’s tightening monetary policy has not changed. In July, the Fed announced another interest rate hike, and the interest rate has reached the highest level in 22 years. Under the influence of high interest rates, the current expectation of a slowdown in the U.S. economy has increased.” Qi Zhengyan said.

(Article source: Securities Daily)

Article source: Securities Daily

Article author: Meng Ke

Original title: In July, the global manufacturing PMI was 47.9%, ending the 4th consecutive month of month-on-month decline

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2023-08-06 16:33:35
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