Global manufacturing contracted in September for the first time in more than two years, as orders and production remained weak, underscoring the growing risks of a global recession.
In this regard, the global manufacturing purchasing managers’ measure issued by “JPMorgan” fell for the fourth consecutive month, to 49.8 last month, according to data released Monday, as readings that came below 50 indicate a contraction, and the latest number It is the lowest since June 2020.
The index of new orders shrank for the third month in a row to the lowest level in more than two years, and the measure of international trade declined, indicating weak demand, as central bankers around the world raised interest rates to fight inflation. The data showed that production also contracted the most in five months.
Moreover, regarding 90 central banks have raised interest rates this year, and half of them have raised them by at least 75 basis points at a time. Energy costs that have risen over the past year due to the Russian war in Ukraine, as well as limited global production capacity, have particularly affected manufacturers.
The report also showed that the backlog index shrank for the third month, the lowest since July 2020. Against the backdrop of a slight expansion in finished goods inventories, the figure indicates the accumulation of some spare capacity in factories.
The manufacturing sector in the Eurozone also fell deeper in September. Only Ireland among the eurozone countries under watch has indicated expansion.
The latest data from Standard & Poor’s Global (S&P Global) showed that France and Germany – the eurozone’s two largest economies – showed the biggest contractions in more than two years.
While the global index declined, measures of factory activity for both the US and China showed expansion in September. The S&P Global measure of US manufacturing improved to 52, while China’s official manufacturing PMI rose to 50.1 – barely entering expansion territory.
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