Trends in Manufacturing: Industry Grows for First Time in Two Years

November 27th, 2020

As cited in recent reports, the JP Morgan Global Manufacturing PMI was 52.3 in September. That amount is an improvement from 51.8 in August.

Here's some further context: these findings were compiled from reports in the UK, eurozone, the US, and Asia. The information comes from monthly questionnaires sent to purchasing managers in survey panels in over 40 countries. In total, this equals approximately 13,500 companies.

Countries involved in this process make up 98% of global manufacturing value-added.

The most updated results suggest that output and new orders experienced a boost for the third month in a row. Simultaneously, expansion was evident in new export business for the first time in over 24 months.

This blog will further explore the manufacturing industry's current health and the insights garnered from JP Morgan’s findings.

China and the UK Are Stunting the US and Eurozone

The US and eurozone manufacturing spaces have been expanding at a fervent pace—but were partially halted by three mitigating factors. Namely, China and the UK were experiencing slower growth levels – while Japan’s ongoing construction served to stifle expansion.

Regardless, this upturn is broad-based—according to the PMI data’s takeaways. The consumer, intermediate, and investment goods industries all seem to be flourishing and expanding.

Speaking of investment goods, producers in this industry saw the highest growth acceleration it has witnessed in nearly ten years.

For new incoming business, the underpinning of higher production volumes proved to be a boon.

Whereas new order intakes skyrocketed more than they have in nearly 32 months. This nearly two-and-a-half-year high stems from the first positive movement in international goods trade since August 2018.

Downward Trends with Silver Linings

Given the way the year has transpired, with the pandemic causing worldwide strife, not all the news is good.

Despite the healthy numbers reflected in JP Morgan’s PMI, global manufacturing employment saw another drop. That’s 10 months in a row where these results have trended downward.

Though it's not all doom and gloom on this front. A promising sign suggests brighter days to come for manufacturing employees struggling to find work. More specifically, the PMI reports show marginal job cutting. In fact, it's the lowest it's been since January – before the pandemic reached North America.

In delving slightly more in-depth into the reports, staffing levels in China and the US took a positive turn. Sadly, the eurozone and Japan saw more cuts to stifle global growth in this space.

Due to the rise in demand for inputs as worldwide economies became active, global supply chains faced challenges, becoming stretched. This should come as no surprise with everything seemingly restarting at once.

Businesses Feeling More Optimistic

Another welcome sign throughout the manufacturing industry is the extraordinary improvement the PMI showed with business optimism. In September, there was a 28-month high in this category.

Throughout the consumer, intermediate, and investment goods industries, bolstered confidence was consistent.

Unsurprisingly, due to the exponential acceleration in the space, investment goods producers displayed the highest improvement rate.

Equip Yourself for Industry Growth

After a challenging year, it appears the outlook is unanimously positive for the manufacturing industry.

With job-cutting slowing down, it means that – soon enough – hiring initiatives will be in full force. In the US and China, that seems to have already happened.

You must ensure your company is ready for this oncoming expansion and equip your organization with talented employees who execute with precision. Doing this by yourself might be overwhelming, given the sheer number of positions you must fill. Don't worry; contact us at Bear Staffing, and we'll handle all your manufacturing hiring needs.