News & Insights

In December, the global manufacturing sector fell back into contraction to 49.6 after activity had stabilized in November. Four of the five PMI components were at levels consistent with deterioration, as output and new orders registered declines after meager growth the month prior, and supplier delivery times lengthened. Manufacturing output declined modestly in December, and with marginal gains in October and November, production stagnated in Q4.

The shift from stabilization back to contraction is reflective of downturns in the U.S. and U.K., hitting 18- and 11-month records, respectively. On the other hand, Greece and Spain posted solid performances, contrasting the deep downturn in the rest of the Eurozone, France and Germany in particular. The fastest growth occurred in India and the Philippines compared to other surveyed countries.

Data broken down by sector exhibited lower output in the intermediate and investment goods industries. However, the consumer goods sector rose for the 17th consecutive month. In the same vein, new orders also increased for intermediate and investment goods, which was only partly offset by growth in new orders for consumer goods.

In December, manufacturing employment declined for the fifth consecutive month but at a slightly slower rate than the prior month. Job cuts were reported in the Eurozone and China, while the U.S. and Japan registered employment growth. Input inflationary pressures picked up to a four-month high, while output cost inflation eased to a nine-month low. As a result, confidence remained subdued, with optimism dropping to a three-month low.