Key findings

• Production and new work intakes increase again
• New export orders rise for first time since August 2018
• Pace of job losses eases

The upturn in the global manufacturing sector continued during September. Output and new orders both rose for the third successive month, while new export business expanded for the first time in over two years. Business sentiment hit its highest level since May 2018.    

The  J.P.Morgan Global Manufacturing PMI™ – a composite index produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – rose to a 25-month high of 52.3 in September,  up from 51.8 in August. The headline PMI has signalled expansions in each of the past three  months. Out of the 29 nations for which PMI data were available, 21 registered growth during the latest survey month.

Notes: Due to later-than-usual release dates, September 2020 manufacturing PMI data for South Korea and Taiwan were not available for inclusion in the global figures.

The rate of increase in manufacturing production remained close to August's 28-month record. Faster expansions in the US and the eurozone were partly offset by slower growth in China and the UK and ongoing contraction in Japan. Sub-sector PMI data signalled that the upturn remained broad-based, with expansions signalled across the consumer, intermediate and investment goods industries. Growth accelerated to a near ten-year high at investment goods producers, but eased in the other two categories.

Underpinning higher production volumes was a further increase in new business. New order intakes rose at the quickest pace in almost two-and-a-half years, boosted by the first increase in international goods trade since August 2018. Concurrent expansions in new export business were seen across the three product categories covered by the survey (consumer, intermediate and investment) for the first time since May 2018.

September saw global manufacturing employment decline for the tenth successive month. However, the rate of job shedding was only marginal and the slowest since January. Staffing levels were raised in the US and China, but reduced in the eurozone and Japan.

Global supply chains remained stretched by the upturn in demand for inputs as economies across the globe reopened. Purchasing activity rose for the second month running and to the greatest extent since June 2018. Meanwhile, average vendor lead times increased for the fourteenth month in a row. Stocks of purchases and finished goods were both depleted further in September.

Input cost inflation accelerated to its highest level since the end of 2018 during September, leading to a further increase in manufacturers' output charges. Both price measures were (on  average) higher in emerging markets compared to their developed nation counterparts.

Business optimism improved to a 28-month high during September, with confidence strengthening across the consumer, intermediate and investment goods industries. The highest degree of positivity was registered at investment goods producers.