Global economy | Manufacturing index continued to decline in

According to the China Federation of Logistics and Purchasing, the global manufacturing PMI was 50% in June 2019, down 0.5 percentage points from May, down 5 percentage points from the same period in 2018, and fell for the third consecutive month. line. In terms of regions, the African manufacturing PMI was flat compared with May, and the manufacturing PMI in Asia, America and Europe declined slightly.

 

 

 

The composite index has changed and the index continues to decline, which means that the global economic growth rate continues to slow down and the downward pressure is further increased. The World Bank's latest Global Economic Outlook report predicts that the world economic growth rates in 2012 and 2020 will be 2.6% and 2.7%, respectively, down 0.3 and 0.1 percentage points from the January 2019 forecast. Faced with continued downward pressure, the world's major economies have also taken countermeasures. First, monetary policy tends to be loose, and second, it seeks multilateral trade. Countries and economies from different regions of Asia, Africa and Europe have signed trade and investment agreements to strengthen economic and trade exchanges between countries, expand international market demand, and avoid the negative effects of trade frictions. Restoring a good trade order is an urgent requirement to ease the downward pressure on the economy.

 

In terms of subregions, the following characteristics are presented:

 

Asian manufacturing economy continued to slow down, PMI fell slightly

 

In June 2019, the Asian manufacturing PMI was 49.9%, down 0.3 percentage points from May, and fell for the third consecutive month. From the perspective of major countries, the manufacturing PMIs of major countries such as South Korea and India have been adjusted to varying degrees. The manufacturing PMI of the Middle East countries such as Saudi Arabia and the United Arab Emirates has remained at a relatively high level. China's manufacturing PMI was flat compared with May, and the main index volatility has narrowed.

 

Under the influence of weak global trade growth, the growth rate of Asian manufacturing industry has also continued to slow down, but Asia still has the basis for maintaining stable development. On the one hand, it shows that the foundation of China's economic stability and operation is better, which is conducive to the stability of the Asian economy. In the second half of the year, China's macro-control policies are more favorable, and counter-cyclical adjustments are intensifying. The effects of a number of policies such as tax reduction and fee reduction, stable investment, and stable finance will continue to emerge, with a corresponding structure, superior efficiency, and growth. Strong support. In particular, the level of economic and trade cooperation between China and the countries along the “Belt and Road” has been continuously improved. On the other hand, Asia is still the main region that attracts global direct investment. The latest annual report released by the United Nations Conference on Trade and Development shows that although global foreign direct investment has declined overall in 2018, countries such as China and ASEAN have seen significant growth against the trend. Foreign capital inflows from developing economies in Asia grew by 4%, making it the region with the largest foreign capital inflows, accounting for 39% of the global total. 

 

European manufacturing economy continues to weaken, PMI continues to fall

 

In June 2019, the European manufacturing PMI fell by 0.4 percentage points to 48.4% from May, and it was below 50% for four consecutive months. This year, it has continued to decline. From the changes in major countries, the French manufacturing industry has rebounded. The manufacturing PMI has rebounded to over 51%. The German manufacturing PMI has rebounded slightly from May, but the index has remained at a low level of 45%. PMI fell back to varying degrees compared to May.

 

The composite index changed, the European manufacturing PMI continued to fall, the manufacturing growth was weak, and the weak operating situation was obvious. The continued weak economic situation has made Europe lose its attractive investment. According to the report of UNCTAD, the total amount of foreign investment attracted by Europe was halved in 2018. Under the influence of “Brexit”, the inflow of foreign capital in the UK also decreased by 36%. In the face of the increasingly declining economic trend, the ECB’s policy orientation has become “patient, persistent and prudent” and said that if the economic data is still not optimistic in the coming months, additional stimulus policies will be adopted, including further reduction of policy rates and Plans such as asset purchase plans.

 

The manufacturing industry in the Americas maintained rapid growth, and the PMI fell slightly.

 

In June 2019, the manufacturing PMI of the Americas fell by 0.2 percentage points to 51.4% from May, and the chain continued to decline for three consecutive months. The continued slowdown in US manufacturing growth slowed the growth of the manufacturing industry in the Americas. The index level of more than 51% indicates that the overall manufacturing industry in the Americas still maintains rapid growth, but the growth momentum has weakened compared with the first half of the year.

 

The ISM (American Institute of Supply Management) report showed that in June 2019, the US manufacturing PMI fell by 0.4 percentage points from May to 51.7%. The main factors dragging down the index come from two aspects. First, the growth rate of market demand has slowed down noticeably. Second, the distribution speed of suppliers has slowed down noticeably. The problems reflected by the enterprises show that the impact of the increase of tariffs on US companies still exists, especially in the distribution of suppliers, which directly leads to a slowdown in the distribution of suppliers. The change in the composite index, the US manufacturing PMI fell month by month, means that the US manufacturing growth momentum has weakened, and the index level of around 51% means that the US manufacturing industry has turned to moderate growth. Data changes show that market confidence has declined with the slowdown in economic growth. According to the latest data from the World Large Enterprise Research Association, the US consumer confidence index fell by 9.8 points to 121.5 in June, the lowest level since September 2017. In the face of possible continued downside risks, the Fed has not made a clear statement, but the probability of restoring interest rate hikes has been greatly reduced, and the possibility of interest rate cuts still exists.

 

Australian manufacturing growth slowed significantly, PMI fell below 50%

 

In June 2019, the Australian manufacturing PMI fell to 49.4%, hitting a new low for the year, indicating that Australia's manufacturing growth slowed significantly. Changes in historical data show that the Australian manufacturing PMI has a large monthly fluctuation, but has remained above 50%. Falling below 50% this month means that the Australian manufacturing sector is weakening and the downside risks are increasing. In order to stabilize economic growth, the Reserve Bank of Australia made a decision to cut interest rates. The July cash rate will be lowered by 25 basis points to 1%. In addition to interest rate cuts, increasing infrastructure construction is also an important means of stabilizing economic growth in Australia. But this has also expanded the Australian government's fiscal deficit to some extent.

 

African manufacturing PMI fell slightly, and the growth was stable

 

In June 2019, the African manufacturing PMI was 51.4% unchanged from May. From the perspective of major countries, manufacturing PMIs in major countries such as Egypt, Kenya and South Africa have increased at different levels from May. Nigeria's manufacturing industry continued to maintain strong growth. The index rebounded slightly, but remained at a high level of over 57%. The index changes show that the African manufacturing industry has maintained steady and rapid growth. The index has remained above 51% for three consecutive months, and the overall moderate growth trend has not changed. From the perspective of economic development in the future of Africa, in addition to the promotion of the African Free Trade Area, which will stimulate the vitality of economic growth in the region, the development potential of the African economy has received widespread attention in the world. Many countries have begun to focus on participating in the economic development of Africa by signing trade and investment agreements with relevant countries in the African region.



Source: Economic operation and market analysis of machinery industry