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Global manufacturing crawls to 2019 finish line as eurozone, UK slumps worsen


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Global manufacturing crawls to 2019 finish line as eurozone, UK slumps worsen

Global factory activity ended 2019 barely in growth territory as the eurozone and U.K. manufacturing sectors remained mired in contraction, while those in the U.S. and China recorded modest improvements, according to survey data published Jan. 2.

The seasonally adjusted J.P.Morgan Global Manufacturing Purchasing Managers' Index, which is also produced by IHS Markit, dropped to 50.1 in December 2019 from 50.3 in the previous month. A reading above 50 indicates monthly global expansion.

Factory production and new orders also logged marginal growth as weak global trade thwarted hopes of a stronger rebound from the downturn seen in the middle of 2019, IHS Markit said.

Eurozone, UK

The eurozone remained the most significant drag on global manufacturing, with the region's final PMI survey reading for December 2019 falling to 46.3 from 46.9 in the prior month, as production declined for the 11th month in a row.

Germany was the worst performer in the euro area, with a PMI of 43.7, down from 44.1 in November 2019. The steep contraction in the German manufacturing sector affected neighboring countries such as Austria and the Czech Republic, according to IHS Markit.

Meanwhile, the final December PMI reading for the U.K. manufacturing sector fell to 47.5 in December 2019 from 47.4 in the previous month. The intermediate and investment goods sectors contracted as overall manufacturing output declined at the fastest pace since July 2012.

US, China

The U.S. and China recorded manufacturing growth in December 2019, although the pace of expansion in both economies weakened month over month.

The final U.S. manufacturing PMI came in at 52.4, edging down from 52.6 in November 2019. While the sector continued to recover from the soft patch seen last summer, the overall rate of expansion is still well below the year-ago level, according to Chris Williamson, chief business economist at IHS Markit.

In China, the Caixin General Manufacturing PMI dipped in December 2019 to 51.5 from 51.8 as new order growth weakened to a three-month low.

"China's manufacturing economy continued to stabilize in December, although the expansion in demand was not as strong as the previous two months," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group.