Global Manufacturing PMI slips below 50 for the first time in 2024. At 49.7 in July, it is the lowest it has been all year, 1.2 points lower than in June (50.8).

This is partly due to a decline in new orders and stocks of purchase. Still, employment remained unchanged and output increased in consumer and intermediate goods industries. Still, this increase was much less than those seen in June.

India, China, the UK, the US, and Brazil had growth in their production, while the Eurozone showed much weaker results. Besides the Eurozone, sharp growth slowdowns in China and the US along with renewed contraction in Japan also contributed to the slowdown at the global level.

Average input costs and selling prices also continued to rise in July, however the rates of increase eased in both cases. Inflation of purchasing costs and output charges was also stronger in developed nations compared to emerging markets.

J.P. Morgan Global Manufacturing PMI gives an overview of the global manufacturing sector. It is based on monthly surveys of over 10,000 purchasing executives from 32 of the world’s leading economies, including the U.S., Japan, Germany, France and China which together account for an estimated 89 percent of global manufacturing output. It reflects changes in global output, employment, new orders and prices. The Global Manufacturing PMI is seasonally adjusted at the national level to control for varying seasonal patterns in each country and is produced by J.P. Morgan and Markit Economics in association with ISM and the International Federation of Purchasing and supply Management (IFPSM).

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. The J.P. Morgan Global Manufacturing PMI provides advance insight into the global manufacturing sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of global markets. The stock market likes to see healthy economic growth because that generally translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The PMI data are also used by many Central Banks to help make interest rate decisions.

The J.P. Morgan Global Manufacturing PMI data give a detailed look at the manufacturing sector including the pace of manufacturing growth and the direction of growth for this sector. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. In addition, its sub-indexes provide a picture of output, employment, new orders and prices.