The global manufacturing sector contracted for the fourth month in a row in August, with new orders falling at the fastest rate in about seven years, a survey compiled by JPMorgan and IHS Markit showed.
The seasonally adjusted JPMorgan Global Manufacturing Purchasing Managers' Index grew slightly to 49.5 in August from 49.3 in July. The four-month-long contraction has been the longest downturn observed since 2012. An index reading below 50.0 indicates a contraction.
Seventeen of the 30 countries surveyed experienced a downturn, with the steepest drops signaled for Germany and the Czech Republic. Japan and the eurozone registered a fall in manufacturing activity as well, while China and the U.S. recorded growth, the survey said about the largest industrial countries. Chinese government data recorded a shrinkage.
The manufacturing sector in the U.K. suffered a decline in August, with the corresponding index falling to a seven-year low. Production grew slightly after declining in the previous two months, while new orders continued to slow. Inflows fell at the fastest rate since September 2012.
Output and new businesses in the consumer goods sector accelerated, while those measures of the intermediate and investment goods sectors shrank. New export orders declined in the three aforementioned sectors. Global export orders declined at the fastest pace since October 2012, with international trade falling for 12 months.
Employment fell globally for the fourth month in a row amid job losses in China and the eurozone and a rise in staffing levels in the U.S. and Japan, owing to an international industrial slowdown. Purchasing activity reduced, while input costs rose slightly and output charges fell for the first time in three years.
"Geopolitical uncertainty weighing on business capital investment remains the main drag on global industry," said Olya Borichevska from JPMorgan global economic research.
Business optimism fell to its lowest level since July 2012, as outlook dimmed, the survey showed.
