Key findings

• Manufacturing PMI little-changed at 54.3 in October
• Record lengthening in supplier lead times
• Steeper increases in output prices and input costs

The rate of expansion in global manufacturing production was the weakest during the current 16-month upturn in October. Output growth was stymied by substantial disruption to raw material deliveries, resulting input shortages, rising cost inflation and a near-stalling of international trade flows.

The J.P.Morgan Global Manufacturing PMI™ – a composite index produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – edged higher to 54.3 in October, up from
54.1 in September. The rise in the headline index reflected a record lengthening of vendor lead times, increased stock holdings and faster jobs growth. This offset the effect on the PMI level of slower increases in both output and new orders.

Of the 31 nations for which October data were available, all except two (Mexico and Myanmar) registered PMI readings above the 50.0 no-change mark. The euro area remained a bright spot, with the top-five ranked countries all members of the currency bloc. The US, Japan and China were in sixth, nineteenth and twenty-eighth positions respectively. Data broken down by sector, signalled expansions across the
consumer, intermediate and investment goods industries.

The upturn in global manufacturing production eased to a marginal pace during October, with rates of expansion slowing in the US, the euro area and the UK. The downturn in China extended into a third successive month while Japan registered renewed growth but at only a modest pace. Among the largest emerging markets, India saw a sharp output growth acceleration, while Brazil sank back into contraction territory.

Production rose at a marginally quicker rate in the consumer goods sector, but decelerated slightly in the intermediate goods category. Meanwhile, the investment goods industry saw output decrease for the first time in 16 months.

The level of incoming new business rose at a slower pace at the start of the final quarter, in part reflecting weaker growth in international trade volumes. Capacity at manufacturers
remained under pressure despite the muted trend in demand, as highlighted by a further solid increase in backlogs of work.

Rising levels of outstanding business, alongside a positive outlook for future growth of manufacturing production, led to a modest increase in employment. That said, the overall degree of business confidence dipped to a 12-month low. Workforce numbers were added to in the US, the euro area, Japan, the UK and Brazil (among others). In contrast, cuts were seen in China and India.

Global supply chains remained under severe pressure during October, with average vendor delivery times increasing to the greatest extent in the survey history. Supplier performance deteriorated to record, or near-record, extents across the consumer, intermediate and investment goods industries.

The impact of supply-chain issues filtered through to price inflation during October. Input costs increased at the fastest pace in over 13 years, while average output charges rose to the greatest extent on record. Rates of inflation in both price measures were noticeably steeper (on average) in developed nations compared to emerging markets.