Global Manufacturing Growth Weakens with Hiring and Optimism Losing Ground

In June, growth in global manufacturing weakened from May, decreasing from 52.7 to 52.2. Output and new orders both improved but at slower paces than the prior month. Meanwhile, lead times lengthened and remain near four-year highs. Employment declined while inventory levels continued to grow as firms prepare for anticipated supply chain disruptions and further cost increases.

The Netherlands, Taiwan, Ireland and Japan had the highest PMI readings in June. On the other hand, Indonesia, Turkey and Poland were among the larger nations to register declines in activity. The growth in manufacturing production occurred across consumer, intermediate and investment goods.

Meanwhile, input and output price growth both softened to three-month lows. At the same time, business optimism dipped to an eight-month low amid rising cost pressures and a softening in output growth. Employment declined at the fastest rate in 11 months as losses in the U.S. and Euro area more than offset higher head counts in China, Japan and the U.K.