Global manufacturing PMI

In October 2021, the PMI of global manufacturing industry rebounded slightly to 55.7%

According to the data recently released by China Federation of logistics and purchasing, in October 2021, the global manufacturing PMI rebounded slightly by 0.1 percentage points to 55.7% compared with the previous month. From a subregional perspective, the growth rate of Asian manufacturing industry has stabilized and rebounded; The growth rate of manufacturing industry in Europe remained stable, while the growth rate of manufacturing industry in America and Africa slowed down.

With the change of the composite index, the growth rate of global manufacturing industry was stable compared with that of last month. In terms of subregions, the manufacturing industry of some Asian countries that were greatly affected by the epidemic has recovered significantly, which has driven the stabilization and recovery of Asian manufacturing industry, and has also become an important driving force for the stable growth of global manufacturing industry. However, the global economic recovery still faces great uncertainty.

The continuing impact of the epidemic on the world economy is consuming the recovery power of the global economy. The imbalance of vaccination also leads to the imbalance of world economic recovery, and the differentiation trend of world economic recovery process is becoming more and more obvious. The rising inflationary pressure increases the cost of the world economy and challenges the tolerance of countries around the world to loose monetary policy. The sustainability of stimulus policies in various countries is also facing a test. Repeated outbreaks and inflationary pressures affect the stability of the world supply chain. Recently, the world economic outlook report of the International Monetary Fund (IMF) slightly lowered the forecast value of global economic growth in 2021 to 5.9%, 0.1 percentage point lower than the forecast in July.

Accelerating vaccination is an important measure to resist the spread of the epidemic. Continuing to strengthen multilateral economic cooperation is an important direction to resist economic downside risks. A sustained recovery of the world economy can only be achieved through global joint anti epidemic and coordinated recovery.

From a subregional perspective, it shows the following characteristics:

African manufacturing continued to slow down and PMI fell continuously

In October 2021, the PMI of African manufacturing industry fell by 0.9 percentage points to 50.5% compared with the previous month, falling month on month for two consecutive months, and the decline this month has expanded compared with the previous month, indicating that the growth rate of African manufacturing industry has shown a continuous slowdown trend. Among the major countries, the manufacturing PMI of Egypt and South Africa fell to varying degrees compared with the previous month.

The continued economic slowdown has increased the uncertainty of Africa's economic recovery. The continued impact of the epidemic has led to a sharp increase in public debt in African countries. As of August 2021, African countries have raised more than US $9 billion in dollar denominated Euro bonds, which has exceeded the annual amount of US $5.9 billion in 2020. The IMF recently released a report that due to the slow vaccination, the economic recovery process in Africa is expected to be slower than that in other parts of the world in 2021. Maintaining political stability, continuing to accelerate infrastructure construction and making good use of external investment to accelerate the transformation and upgrading of local economy are the main directions for the sustained and stable recovery of African economy.

The growth rate of Asian manufacturing industry has accelerated, and PMI has increased continuously

In October 2021, the PMI of Asian manufacturing industry increased by 0.6 percentage points to 51.5% compared with the previous month, rising month on month for two consecutive months, and the increase was expanded compared with the previous month. From the perspective of major countries, manufacturing activities in Japan, India, Indonesia, Malaysia, the Philippines and Vietnam, which were greatly affected by the epidemic, showed an accelerated recovery trend, and manufacturing PMI rebounded significantly compared with last month, driving the continuous stabilization and recovery of manufacturing growth in Asia.

The accelerated recovery of Asian manufacturing industry shows that the impact of the epidemic on some Asian countries has been alleviated, but the impact of the epidemic has not been completely eliminated, and the pressure of inflation is also perplexing the recovery of Asian economy. In view of the impact of the epidemic on some Asian countries in recent months, the IMF lowered its Asian economic growth forecast for this year and reduced the Asian economic growth in 2021 to 6.5%, 1.1 percentage points lower than the forecast in April. Nevertheless, Asia is still the fastest growing region in the world. Accelerating digital transformation, strengthening regional economic and trade cooperation and maintaining the stability of supply chain and industrial chain have become the consensus of Asian countries to get rid of the impact of the epidemic and promote economic recovery. The RCEP agreement, which will take effect in January 2022, is of great significance to promote free trade in Asia and stabilize the industrial chain.

The growth rate of manufacturing industry in Europe remained stable, and the PMI was flat with the previous month

In October 2021, the PMI of European manufacturing industry was 57.6%, unchanged from the previous month, indicating that the growth rate of European manufacturing industry ended the continuous slowdown trend and remained stable this month. From the perspective of major countries, the manufacturing PMI of Britain, Italy and Russia increased to varying degrees compared with the previous month, and the manufacturing PMI of Germany and France decreased slightly compared with the previous month.

With the change of comprehensive data, the European manufacturing industry maintains a stable recovery trend, but it is also facing downward pressure. The impact of the epidemic on Europe has not been eliminated. The weekly epidemic report of the World Health Organization shows that in the week ending October 24, the number of newly confirmed cases in Europe accounted for more than half of the world. The recurrence of the epidemic is still an important factor perplexing Europe's economic recovery. At the same time, the pressure of inflation has also appeared. In October, the inflation rate in the euro area continued to rise, reaching an annual rate of 4.1%, a 13 year high. Although facing inflationary pressure, considering that the impact of the epidemic continues, the European Central Bank still maintains the current interest rate policy, emphasizing the need to maintain a loose monetary policy and maintain the current scale and speed of bond purchase.

The growth of manufacturing industry in the Americas slowed down and PMI fell

In October 2021, the PMI of manufacturing industry in the Americas decreased by 0.4 percentage points to 59.3% compared with the previous month, indicating that the growth rate of manufacturing industry in the Americas slowed down compared with the previous month. Among the major countries, the manufacturing PMI of the United States and Brazil fell to varying degrees compared with the previous month, resulting in the overall slowdown of manufacturing growth in the Americas.

The recurrence of the epidemic is still the main factor perplexing the recovery of manufacturing in the United States and Brazil. From the perspective of the United States, the ISM report shows that in October, the PMI of the U.S. manufacturing industry decreased by 0.3 percentage points to 60.8% compared with the previous month. The sub index shows that the production of the U.S. manufacturing industry is relatively stable, and the decline of the production index is small, but the demand side has a great impact. The new order index of the U.S. manufacturing industry decreased by 6.9 percentage points to 59.8% compared with the previous month. Data changes show that the recurrence of the epidemic is restraining the growth of manufacturing demand in the United States. Based on the impact of the U.S. epidemic, the IMF lowered the U.S. economic growth forecast in the latest version of the global economic outlook report. It is expected that the U.S. economic growth is expected to be 6.0% in 2021, down 1 percentage point from the previous value. The impact of inflationary pressure on the United States has also appeared. According to the data of the U.S. Department of labor, the inflation rate rose by 5.4% year-on-year in September, the largest increase since 2008. From the policy perspective, the Federal Reserve plans to reduce the scale of dollar asset purchase in November and slow down the speed of bond purchase, but still maintain the benchmark interest rate between 0-0.25%.