Key findings

• Manufacturing PMI at 53.8 in December
• Output, new orders and new export business rise
• Supply-chain stresses remain at near record levels

The end of 2020 saw rates of growth in global manufacturing production and new orders remain among the strongest seen over the past decade, as the sector continued to recover from the COVID-19 related downturn earlier in the year. However, world supply chains stayed severely stretched, leading to marked delays and disruption to raw material deliveries, production schedules and distribution timetables.

The J.P.Morgan Global Manufacturing PMI™ – a composite index produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – was unchanged from November's 33-month high of 53.8. The headline PMI has remained above the neutral 50.0 mark for six successive months.

Notes: Due to a later-than-usual release date, December 2020 data for Kazakhstan and Myanmar were not available for inclusion in the global figures.

December saw manufacturing production rise at a rate close to highs achieved over the past decade, despite easing slightly from the prior month. Germany, Brazil and India saw the strongest output growth, while expansions were also seen in most of the other large industrial regions including China, the US and the euro area (as a whole). Although Japan was a notable exception to the growth trend, it nonetheless saw output volumes stabilise following 23 months of decline.

Manufacturing new orders rose for the sixth successive month and at a solid pace in December. Signs of recovery and growth in most major domestic markets were accompanied by a fourth successive monthly increase in new export orders. The trend in employment remained subdued, however, with no change in staffing levels signalled. Job creation in the US and Japan (albeit only marginal in the latter case) were offset by slight drops in staff headcounts in China, the euro area and the UK.

Supply chains were severely stretched In December, as they struggled to fully recover following the disruptions caused by the global pandemic. Average supplier lead times lengthened to the greatest degree since April and to one of the greatest extents in the survey history. Purchasing activity rose for the fifth successive month, while inventory holdings at manufacturers fell further.

Price inflationary pressures continued to build in December. Average input costs rose at the fastest pace since July 2018, a key factor underlying the steepest increase in selling prices for two-and-a-half years. Global manufacturers meanwhile maintained a positive outlook for their performance over the year ahead, although the degree of optimism dipped slightly from November’s high.

Sector summary
Broad-based growth of output and new orders was registered across the consumer, intermediate and investment goods industries in December, although the consumer goods category tended to fare less well than the other sectors. Job creation at intermediate goods producers was offset by reduced headcounts in the consumer and investment goods industries. In all three cases, severe lengthening of supplier lead times was signalled.