According to J. P. Morgan and S&P Global, the average data of leading indicators of the state of global industry, purchasing managers’ indices (PMI), indicate a further weakening of demand for global industry products. Only one-third of the countries showed an increase in activity, with indicators in the euro zone and the US showing further weakening in demand. In China, the index indicates growth, but it is decelerating. Such cooling has already had an impact on purchasing prices.
The global industrial PMI in June fell to the lowest value in the last six months, with 48.8 points against 49.6 points in May (50 points is the bar that separates the growth of business activity from its decline), while only 10 of the 29 countries that are taken into account in the calculation of the average indicator showed an increase in industrial activity, as evidenced by the data by J. P. Morgan and S&P Global.
The decrease in the indicator was caused by weakening demand and reduction in the number of new orders, especially export orders. For instance, a decrease in external demand was observed in the USA, euro zone, Japan, South Korea and Brazil, while in China the increase was insignificant. As a result, manufacturers also reduced the volume of purchases.
The weakest level of activity is shown by PMI indicators in the euro zone countries: the indicator fell sharply to 43.4 points, which is the minimum over 37 months (in May, the indicator was 44.8 points). At the same time, prices for raw materials and components were declining at the fastest pace since July 2009.
In the USA, the activity remains higher but also continues to decline; in June, the index reached 46.3 points against 48.4 points in May.
The Chinese Caixin indicator also slowed down, although it remained within the growth zone, with 50.5 points in June compared to 50.9 in May.
In Russia, the opposite dynamics is observed; as export orders increase, the costs of raw materials and components are also growing. Despite a slowdown compared to May (52.6 points versus 53.5 points), the Russian industrial PMI turned out to be one of the highest, with only India and Thailand higher in June (expansion of activity was also observed in Indonesia, Kazakhstan, Greece, Turkey, Mexico, Philippines, China and Myanmar).