China Central Broadcasting Network Beijing, August 6 News On August 6, the China Federation of Logistics and Purchasing released data showing that the global manufacturing PMI in July 2022 was 51.2%, down 1.1 percentage points from the previous month, and fell for two consecutive months. , hit a new low since July 2020. In terms of sub-regions, in July, the manufacturing PMIs of Asia, Europe, America and Africa all declined to varying degrees compared with the previous month, and all hit periodic lows.
The composite index changes, and the global manufacturing PMI hit a new low, which means that the growth rate of the global manufacturing industry continues to slow down, the momentum of global economic recovery is further weakened, and the downward pressure is increasing. The impact of the epidemic, inflationary pressures, geopolitical conflicts, tightening monetary policy and many other factors have led to the weakening of the global economic recovery momentum. The combination of these factors has further increased the pressure on global economic demand contraction. Based on concerns about downside risks to the global economy, the International Monetary Fund lowered its forecast for global economic growth in 2022 from 3.6% to 3.2% in its July World Economic Outlook report.
The balance between ensuring economic recovery and fighting inflation is still a problem facing the world‘s major economies. Judging from the changes in the price indices of major countries, the relevant policies to deal with inflation have restrained the momentum of rapid rise in raw material prices to a certain extent. The ISM report shows that although the US manufacturing price index is still at 60%, it has fallen for four consecutive months. Although the price indices in Germany and France were at high levels, they also declined to varying degrees from the previous month. However, inflationary pressure is still the main problem currently plaguing the global economic recovery, and the pressure of slowing down the economic recovery caused by combating inflation is still relatively large.
African manufacturing continues to weaken, PMI falls to contractionary territory
In July 2022, the African manufacturing PMI was 49.1%, a decrease of 0.9 percentage points from the previous month, a month-on-month decrease for two consecutive months and a new low since August 2021. The index fell below 50%, indicating that the African manufacturing industry continued the downward trend of the previous month, continued to weaken, and the downward pressure was increasing. Looking at major countries, the manufacturing PMIs of South Africa and Egypt both fell to low levels below 48%.
Global economic fluctuations have put downward pressure on Africa, which is highly dependent on external sources. In particular, the shock of the international commodity market has a more direct impact on the African manufacturing industry. Africa is facing an energy and food crisis, which is causing inflationary pressures. According to UNCTAD’s Economic Development in Africa Report 2022, despite the continent’s decades of efforts to diversify its exports, 45 of the 54 countries still rely on exports of agricultural, mining and extractive primary commodities. The continuous advancement of the African Free Trade Area will undoubtedly eliminate trade barriers, promote the diversification of African trade, and gradually reduce the dependence of the African economy on the external economy.
European manufacturing slows down, PMI falls near critical point
In July 2022, the European manufacturing PMI was 50.1%, a month-on-month decrease for 6 consecutive months, a decrease of 2.3 percentage points from the previous month, and the decline continued to expand from the previous month, hitting a new low since July 2020. Looking at major countries, manufacturing PMIs in Germany, France and Italy and Spain all fell below 50%.
Under the influence of multiple factors such as the epidemic, inflation and geopolitical conflicts, the growth rate of European manufacturing is accelerating and slowing down. Affected by the relaxation of epidemic prevention measures and the influence of mutant strains, the number of new crown infections in Europe has increased rapidly recently, and the new round of epidemics has disrupted the stability of European economic recovery. Affected by geopolitics, Europe is facing a situation where energy prices continue to rise, driving the inflation rate to continue to rise. Preliminary data from Eurostat showed that the inflation rate in the euro zone reached an annual rate of 8.9% in July, a record high. Energy prices rose 39.7% year-on-year, which was the main reason for the increase in inflation that month. Inflation rates in the euro area continued to rise, posing challenges to the European Central Bank’s monetary policy. Continued rate hikes may be effective in curbing inflation, but will also increase the risk of a recession.
Asian manufacturing growth slows, PMI down from last month
In July 2022, the Asian manufacturing PMI was 50.7%, ending the upward trend for two consecutive months, down 0.7 percentage points from the previous month. From the perspective of major countries, the manufacturing PMIs of China, Japan, South Korea and Vietnam all declined to varying degrees from the previous month.
Changes in the data showed that the growth rate of manufacturing in Asia slowed from the previous month. In terms of fluctuation range, the trend of Asian manufacturing industry is relatively stable relative to Europe, America and Africa. The relatively stable development environment in Asia is one of the guarantees for the smaller fluctuations in the Asian economy. Asia remains an important engine driving the recovery of the world economy. According to IMF estimates, Asia’s share of the world‘s total economy in 2021 will increase by 0.2 percentage points to 47.4% compared with 2020. The establishment and promotion of RCEP will continue to deepen Asia’s leading role in global economic development. However, it should also be noted that weak global economic growth and geopolitical conflicts are also affecting the economic development of Asia. The Asian Development Bank recently released a report predicting that the GDP growth rate of developing economies in the Asia-Pacific region will be 4.6% in 2022, down 0.6 percentage points from the April forecast.
The growth rate of manufacturing in the Americas continues to slow down, and the PMI continues to decline
In July 2022, the manufacturing PMI in the Americas was 52.6%, down 0.6 percentage points from the previous month. Data from major countries showed that the manufacturing PMIs of the United States, Canada and Brazil all showed a downward trend for 2 consecutive months.
The increased pressure on demand contraction is the main problem facing the manufacturing industry in the Americas. Taking the United States as an example, the ISM report shows that in July, the US manufacturing PMI was 52.8%, down 0.2 percentage points from the previous month. Among them, the production and new orders index both decreased from the previous month. However, from the index level, the production index is still at a high level of 53.5%, but the new orders index fell to 48%, below 50% for two consecutive months, hitting a new low since June 2020. Changes in the new orders index showed that demand in the US market is facing downward pressure. The U.S. GDP has declined for two consecutive quarters, adding to worries about a U.S. recession. The Federal Reserve believes that there is no recession in the current U.S. economy and needs to observe the impact of multiple interest rate hikes on economic growth, inflation and employment. According to the latest survey by the Conference Board, the CEO confidence index of large companies has declined for four consecutive quarters.Return to Sohu, see more
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