Global manufacturing turning a corner, says J.P. Morgan
- July 2, 2020
The J.P.Morgan Global Manufacturing PMI—a composite index produced by J.P.Morgan and IHS Markit in association with the Institute for Supply Management and the International Federation of Purchasing and Supply Management—rose by a record 5.4 points to 47.8, up from 42.4 in May.
“June saw a further momentum shift in the global manufacturing sector after the economy started on the recovery path in May,” said Olya Borichevska, global economist at J.P.Morgan.
“The output PMI increased for a second consecutive month in June rising a total of 14.5-points. We look for the PMI to continue moving higher as growth firms. This of course is premised on continued easing of activity restrictions. With demand rebounding, the focus is starting to shift to the labor market, with hopes that the current process of job retrenchment proves shallower and shorter than expected.”
While that report did not include the numbers for Canada (those will be in a later release), the trend bodes well for a manufacturing nation like Canada, which has industrial customers around the world.
The report says national PMI data indicates expansions in output for 15 out of the 32 countries for which June data were available, up from just two in May. Growth was registered in China, France, Italy, the UK and Brazil, while downturns eased in the US, Japan, Germany, South Korea and India. Only Mexico saw a steeper pace of contraction than in the prior survey month.
The restrictions and lockdowns in place to combat the COVID-19 pandemic are still hampering global supply chains, with average vendor lead times growing for the eleventh consecutive month, despite reduced purchasing.