Key findings

• Global Manufacturing PMI at 56.0 in May
• New order growth hits 11-year high
• Capacity pressures drive surge in price inflation

The global manufacturing sector expanded at a robust pace in May. Production rose at one of the fastest rates in a decade, as new order growth accelerated to an 11-year high. The outlook remained positive, with manufacturers forecasting further increases in output over the next 12 months.

The J.P.Morgan Global Manufacturing PMI™ – a composite index produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – posted 56.0 in May, up from 55.9 in April, to register its highest level in over 11 years (April 2010). Solid improvements in business conditions were seen across the consumer, intermediate and investment goods sectors.

Notes: A later-than-usual release date meant May data for Indonesia were not available for inclusion in the global manufacturing figures.

24 out of the 30 nations for which May data were available registered better business conditions. Europe was a bright spot in the upturn, with the six top-ranked countries (the Netherlands, Austria, the UK, Germany, Ireland and Italy) located in that region. The US also saw a solid pace of expansion. Subdued growth was registered in Japan, China, Russia and India. The Philippines, Turkey, Thailand, Mexico, Colombia and Myanmar all saw contractions.

Manufacturing employment rose for the seventh consecutive month in May, with the rate of jobs growth remaining close to April's three-year high. The consumer, intermediate and investment goods industries all registered solid increases in workforce numbers. Job creation was led by the euro area, where staffing levels rose at a near-record pace. The UK saw a survey record increase (since 1992). The US, Japan and China were among the other nations to register increased employment, although the gain in China was only slight.

Pressure on capacity continued to build during May. Average vendor lead times lengthened to the greatest extent in the survey history, while backlogs of work at manufacturers rose at a near survey-record pace. This fed through to increased inflation, as highlighted by the steepest rise in input costs for over a decade and record inflation of selling prices.

Delays in the receipt of goods ordered from suppliers combined with higher production needs encouraged manufacturers to raise purchasing levels in May. Buying activity expanded for the tenth month in a row and to the second-greatest extent on record. This led to a slight gain in pre-production stocks for a second successive month. In contrast, finished goods inventories fell further.