Global manufacturing activity contracts in 2024
Business optimism is also at a 3-month low.
Global manufacturing contracted at the end of 2024, with both output and new orders declining in December following slight increases, according to J.P. Morgan and S&P Global Market Intelligence.
Regional differences were evident, with business conditions influenced by the possibility of impending US tariffs.
The J.P. Morgan Global Manufacturing PMI fell to 49.6 in December from 50.0 in November, marking the fifth decline in six months. Four out of five PMI components indicated a worsening of overall operating conditions, with only supplier delivery times showing improvement.
Manufacturing production experienced a slight decline in December, suggesting stagnation over the final quarter of the year.
Of the 30 nations with available PMI data, only 13 reported rising production with India, the Philippines, Spain, Greece, Taiwan, and Canada showing the strongest output expansions. France, Germany, and Austria, however, experienced the sharpest declines in production.
The eurozone manufacturing sector saw the steepest contraction in 14 months, with notable downturns in the US and UK as well. Japan reported a slight decrease in production, whilst China saw a modest increase. Intermediate and investment goods industries saw lower production levels, contrasting with the consumer goods sector, which reported growth for the seventeenth consecutive month.
International trade volumes decreased for the seventh month in a row, with only eight nations witnessing an increase in new export orders. Business sentiment remained subdued in December, leading to a decline in employment for the fifth consecutive month. Input cost inflation rose to a four-month high, whilst selling price inflation decreased to a nine-month low.
Overall, the global manufacturing outlook for the end of 2024 was uncertain, with varying performances across different regions and sectors. The impact of US tariffs and overall economic conditions contributed to the contraction of the global manufacturing sector at the close of the year.
