The flash Purchasing Managers’ Index (PMI) for the manufacturing sector for November paints an almost completely negative picture, with India as the only bright spot among the handful of countries for whom we have the initial reading. The UK manufacturing PMI slipped to a 9-month low, with output falling alongside the other elements of the calculation.
The flash Purchasing Managers’ Index (PMI) for the UK manufacturing sector in November continued its slide from the burst of positive readings over the Summer, falling to 48.6 (49.9 in October and a peak of 52.5 in August). The main driver of this was the output element slipping back below the 50 threshold to a 9-month low in the face of subdued demand, delayed investment decisions and cutbacks to new projects.
The rate of contraction in new orders was also at its fastest since February, linked to weaker global economic conditions, reduced capital spending, and intense competition in export markets – companies in the automotive sector also noted a general slump in demand. The theme of “fastest for nine months” also applies to the pace of decline in manufacturing employment.
The manufacturing PMI for the Euro-zone slipped further in the flash estimate for November, falling to 45.2 (it was 46.0 in October). This was largely due to an accelerated fall in output (extending the run of negative figures to 20 months), although orders also fell at a faster pace than in October and employment in manufacturing fell at the fastest pace since August 2020.
At this stage, we only have individual reports for France and Germany and while they are both still firmly negative, the latest movements were in opposite directions. France saw its manufacturing PMI fall to a 10-month low of 43.2 (44.5 in October) while Germany ticked up to 43.2 (from 43.0), its highest since the same figures was recorded in July.
In France, the output element of the calculation fell to an 11-month low with manufacturers citing the automotive, construction and cosmetic industries as drags, in addition to weakness across international markets. This was coupled with the weakest performance for new export orders since August 2020. In Germany, the pace of decline in output moderated slightly and this helped to edge up the overall manufacturing PMI since orders are still falling, albeit not quite as quickly as in recent months. Both countries also continue to see a reduction in employment in the manufacturing sector.
For Asia, there is the contrast of an improvement for Australia (49.4 from 47.3 in October) and a small decline for Japan (49.0 from 49.2) while both remain slightly below the threshold of contraction and expansion. Meanwhile, India continues to lead the way and although their manufacturing PMI edged down (57.3 from 57.5), it remains the strongest reading that we monitor and with new orders still very strong (both domestic and export) it is likely to remain there in the short-term.
Because of our publishing schedule, the figures for the USA won’t be published until this afternoon but you can access those, and all the other reports on the “PMI by S&P Global” website at https://www.pmi.spglobal.com/Public/Release/PressReleases or on request from MTA.