International manufacturing data slips lower

US-China trade conflict weighs heavily on growth with feeble orders and low optimism

A global manufacturing index produced by JPMorgan and IHS Markit fell in June to its lowest level in seven years. Photograph: Michael Nagle/Bloomberg

A global manufacturing index produced by JPMorgan and IHS Markit fell in June to its lowest level in seven years. Photograph: Michael Nagle/Bloomberg

 

The global manufacturing slump deepened in June, with data from around the world illustrating the extent to which the US-China trade conflict is weighing on growth.

A global manufacturing index produced by JPMorgan and IHS Markit fell to its lowest level since 2012 in June, with new orders weakening sharply and business optimism at the lowest level on record. Its monthly reading of 49.4, down from 49.8 in May, indicated a majority of firms reported falling output.

Irish figures published earlier showed the manufacturing sector here declined for the first time since 2013 with a reading of 49.8 in June, marginally below the cut-off point at 50 between contraction and expansion.

South Korea

In China, manufacturing suffered a relapse after three months of growth, with the Caixin-Markit purchasing managers’ index slipping below 50.

Other economies in the region are also suffering. South Korea, often seen as a global bellwether, recorded the biggest year-on-year fall in exports for 3½ years in June, according to preliminary data.

The picture is just as bleak in the euro zone, where a majority of manufacturers in all of the region’s large economies except France reported falling output.

Brexit woes

In the UK, where the sector’s woes have been compounded by Brexit-related uncertainty, the index of activity produced by IHS Markit sank to its lowest level since 2013.

The US is the only region in which manufacturing activity still appears to be expanding, but even there the trend is worrying: the Institute for Supply Management’s gauge of activity, also published on Monday, pointed to the slowest growth since October 2016, and new orders have weakened . – Copyright The Financial Times Limited 2019