Cctv newsAccording to the China Federation of Logistics and Purchasing, the global manufacturing PMI was 47.8% in June 2023, down 0.5 percentage points from the previous month, down for four consecutive months and below 50% for nine consecutive months, once again hitting a new low since June 2020. In terms of regions, the PMI of Asian manufacturing industry was the same as last month, still above 50%; The PMI of African manufacturing industry has declined, but it is still near the critical point of 50%; Both the European manufacturing PMI and the American manufacturing PMI continued to drop from last month and continued to operate below 50%.
The index has remained below 50% continuously and hit a new low, which means that the downward trend of global manufacturing industry has intensified and the road to recovery still faces great challenges. High inflation, persistent geopolitical conflicts, financial market turmoil and the increase of trade barriers all continue to affect the growth momentum of the global economy. According to the latest survey report of the World Economic Forum, economists’ expectations of the world economic prospects in 2023 are mixed, with 45% of chief economists believing that a recession may occur and 45% of chief economists believing that it is unlikely, which means that the current global economy is constantly facing greater uncertainty. From the trend of various regions, the manufacturing industry in major European and American countries continues to decline and continues to bottom out, which is the main drag on the global manufacturing industry. The manufacturing industry in Asia continues to maintain a stable trend, and the manufacturing industry in major African countries also remains relatively stable, providing a certain stable foundation for the global manufacturing industry.
Although the overall downward pressure on the global economy continues, there are still some positive factors to support the subsequent recovery of the global economy. First, regional economic and trade cooperation is closer, and the implementation effect of RCEP is expected to continue to emerge. It has been some time since RCEP came into full force for 15 signatory countries in the early stage. With the gradual implementation of policies and measures, intra-regional trade barriers will be effectively reduced and trade processes will be simplified, providing a foundation for the steady growth of global trade. Second, the expansion of BRICS countries is under way, providing new support for the stability of the global financial system. The recent BRICS foreign ministers’ meeting reached a basic consensus on the applications of Saudi Arabia, Egypt and other countries to join the BRICS and the expansion of the BRICS. Many countries seek to join the BRICS Bank, which will help to better carry out economic and financial cooperation and promote a more balanced and inclusive new financial order.
The downward pressure on European manufacturing industry has increased, and PMI has continued to drop.
In June 2023, the PMI of European manufacturing industry was 45.4%, down 0.8 percentage point from last month, down for five consecutive months, and below 50% for 11 consecutive months, hitting a new low since June 2020. From the perspective of major countries, Russia’s manufacturing industry remains stable, but the growth rate has slowed down. The PMI dropped by 0.9 percentage points from last month to 52.6%, and the index is still in the expansion range of more than 50%. However, the manufacturing industries in Germany, Britain, France and Spain all maintained a downward trend, with the PMI below 50%. Among them, the manufacturing industry in Germany had a relatively large downward adjustment, with the PMI falling by 2.6 percentage points from the previous month to 40.6%, and the index continuously hit a new low.
The downward pressure on the manufacturing industry in the euro zone has increased, and its economy has fallen into a technical recession. According to the data released by Eurostat recently, the GDP of the euro zone in the first quarter of this year decreased by 0.1% month-on-month, which was lower than the initial value. At the same time, the final value of GDP in the fourth quarter of 2022 was also lowered to 0.1% month-on-month, and the initial value was flat, which means that the GDP of the euro zone has been negative for two consecutive quarters, and the economy has fallen into a technical recession. At the same time, despite such a fragile economy, the European Central Bank still maintains a tight monetary policy stance. At the monetary policy meeting held on June 15th, the European Central Bank decided to raise the three key interest rates in the euro zone by 25 basis points. At the same time, at the recent European Central Bank Forum, policymakers once again made hawkish remarks. At present, some experts predict that the European Central Bank will raise interest rates again in July and September. The risk of stagflation faced by Europe is further aggravated, and its economy may continue to be under pressure in the short term.
The manufacturing industry in America continued to decline, and PMI hit a new low.
In June 2023, the PMI of American manufacturing industry was 46.5%, down 0.8 percentage point from last month, and it was running below 50% for eight consecutive months, which was the lowest level since June 2020, indicating that American manufacturing industry continued to maintain a downward trend, and the slowdown was accelerated. Data from major countries show that the manufacturing PMI of the United States, Brazil, Canada and Colombia is below 50%, except for Mexico, where the manufacturing industry is above 50%.
According to the US data, the ISM report shows that the PMI of the US manufacturing industry dropped by 0.9 percentage points from last month to 46%, which was lower than 50% for eight consecutive months. The decline in demand for manufacturing orders in the United States slowed down, and the new order index rebounded by 3 percentage points from last month to 45.6%. However, the production activities of enterprises slowed down, and the production index dropped by 4.4 percentage points from last month to 46.7%. Both inventory and employment declined. The raw material inventory index and employee index decreased by 1.8 and 3.3 percentage points from last month to 44% and 48.1% respectively, both of which fell below 50%, reflecting that the current manufacturing enterprises tend to be cautious about future expectations. At the same time, despite the recent slowdown in inflation growth in the United States, the US CPI increased by 4% year-on-year in May, the smallest year-on-year increase since March 2021, but it still has not reached the target point, and with the support of strong employment data in the near future, the Fed will still maintain a tight monetary policy. The "bitmap" forecast in the monetary policy meeting in June shows that there will be two interest rate hikes this year. On the whole, the American economy still faces great challenges. Recently, the IMF highlighted the risks of the US economy in its report. The IMF believes that the longer the high interest rate lasts, the greater the possibility and impact of financial chain breakage, including the US Treasury bond market, and the more difficult it may be to recover.
The manufacturing industry in Africa has slowed down steadily, and the PMI is still around 50%
In June, 2023, the PMI of African manufacturing industry was 49.8%, down 0.4 percentage points from last month, but it remained at around 50%, indicating that the trend of African manufacturing industry remained relatively stable. From the perspective of major countries, Nigeria’s manufacturing industry still maintained a steady growth trend. Although the manufacturing PMI decreased from last month, it remained above 53%. The decline of Egypt’s manufacturing industry slowed down, and the PMI was still below 50%, but it increased from last month. South Africa’s manufacturing industry showed an accelerated decline, and the PMI fell below 48%.
Although the trend of manufacturing in Africa shows some signs of slowing down under the downward pressure of the global economy, the index remains at the critical point of around 50%, indicating that the current African economy remains relatively stable and has certain development potential. Especially with the in-depth development of the Belt and Road cooperation, China-Africa economic and trade cooperation has been continuously optimized and upgraded, moving towards high-quality development. Relevant data of the recently held China-Africa Economic and Trade Expo show that many data of China-Africa economic and trade cooperation have reached a new high. The General Administration of Customs recently issued the China for the first time — African trade index, which is 100 points based on 2000 and reaches 990.55 points in 2022, shows the rapid development trend of China-Africa trade. The sustained growth of the bilateral trade volume between China and Africa has not only promoted Africa’s development, but also created more favorable conditions for international cooperation with Africa and continuously promoted the steady improvement of Africa’s economy.
Asia’s manufacturing industry maintained a stable trend, with PMI unchanged from last month.
In June, 2023, the PMI of Asian manufacturing industry was 50.4%, which was the same as last month and was above 50% for six consecutive months, indicating that Asian manufacturing industry continued to maintain a steady growth trend. From the perspective of major countries, although the PMI of China’s manufacturing industry is still below 50%, the economic operation has stabilized, the downward trend of market demand has slowed down, the accelerated growth of new kinetic energy demand has become more prominent, the production of enterprises has increased steadily, the destocking of raw materials and finished products has continued to advance, and the market price has also stabilized; India’s manufacturing industry continues to maintain a high growth rate, although it has slowed down from last month, but the PMI is still above 57%; Japan’s manufacturing industry contracted again, and the PMI fell below 50%; Vietnam and South Korea’s manufacturing industry still maintained a downward trend, with PMI below 48%.
At present, the PMI of Asian manufacturing industry continues to run above 50%, which shows that under the downward pressure of the global economy, the Asian economy still maintains good resilience and steady growth. At present, China is still an important engine of economic growth in Asia. Fitch Ratings, an international rating agency, stressed in its Global Economic Outlook report recently that China will become the fastest growing country among the major economies in the world, and it is estimated that the annual economic growth rate will be 5.6%, 0.4 percentage points higher than the forecast in March. Officials of the International Monetary Fund also said earlier that China’s economy is expected to grow by 5.2% in 2023, which will continue to be the growth engine of the Asia-Pacific region, and China’s economy will also be an important driving force for global economic recovery in the future.