After years of industrial decline in the world’s advanced economies, manufacturing is now experiencing a solid revival. The global manufacturing purchasing managers’ index (PMI), a measurement of the sector’s health, rose to 54 in November, up from 53.5 the previous month, and the highest reading since March 2011. Readings above 50 signal expansion.
Factories around the world recorded the highest levels of output, new orders, and employment in years, according to data from a JPMorgan and IHS Markit report published today. An improvement in the global economy and unexpected increase in global trade is helping drive industrial growth. That should hopefully increase domestic demand and further boost economic growth. There are also signs of inflation returning as input prices and output charges accelerated above the long-run average.
This jump in manufacturing is increasingly coming from the world’s developed markets. The euro zone’s PMI was near a record high at 60.1, a reading that has only once been higher, in 2000. Manufacturing activity in the UK was also the highest in more than four years, while Japan’s was the highest since early 2014. Even though the US PMI reading was slightly lower than in October, the country is still on course to have its best quarter since early 2015. Meanwhile, China’s PMI fell to a five-month low as the nation reported job losses in the sector.