Despite small increases in the US and the UK in September, the JPMorgan Global Manufacturing Purchasing Managers’ Index (PMI) slipped into the negative territory. The PMI came in at 49.9, and since a reading below 50 signifies contraction, the global manufacturing sector contracted last month. The chart shows the steady deterioration in manufacturing since the beginning of this year.
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The data shows that although the focus of the markets is currently the euro zone, the slowdown is global in scope. Also, it is likely to get worse. David Hensley, director of Global Economics Coordination, says, “The trend in new orders has switched into reverse gear, exacerbated by declining international trade flows. The signs point to weak growth or possible month-to-month declines in industrial production in the next few months.”
Graphics by Sandeep Bhatnagar/Mint