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A Spring Slowdown for Manufacturing?

Posted By Paul Tate, April 25, 2013 at 10:11 AM, in Category: Manufacturing Leadership Community

Preliminary global manufacturing figures suggest a slowdown in industrial activity across many of the world’s major economies this month.

The U.S. flash manufacturing purchasing managers index (PMI), released by market analysts Markit, fell to 52.0 in April, down from 54.6 in March. While still above the 50 threshold that marks the difference between expansion and contraction, this is the lowest reading in six months and the sharpest monthly drop in U.S. manufacturing sector activity since June 2010. A separate U.S. manufacturing PMI ranking from the Institute for Supply Management (ISM) is due out on May 1.

In China, the flash manufacturing PMI for April fell to 50.5 from 51.6 last month, according to HSBC Bank. "New export orders contracted after a temporary rebound in March suggesting external demand for China's exporters remains weak," commented HSBC economist Hongbin Qu. "Weaker overall demand has also started to weigh on employment in the manufacturing sector."

In Europe, the flash Eurozone manufacturing PMI also slipped in April – down to 46.5 from 46.8 in March for the 17-nation bloc. Perhaps most worrying here is that manufacturing activity in Germany, Europe’s industrial powerhouse, has contracted at the sharpest rate in four months, down to 47.9 in April from 49.0 in March. There are still one or two brighter spots however. France’s manufacturing sector, which has suffered significant contraction over recent months, inched up to 44.5 in April from 44.0 in March.

Many of these figures are below market expectations and are increasing concerns that slowing demand, and its impact on energy and commodity prices, may hinder global recovery prospects for the rest of the year. Last week the International Monetary Fund also called for more economic stimulus from national governments as it clipped its global growth forecast from 3.5% to 3.3% for 2013.

What’s your view? Are you experiencing a slowdown in demand for your products? How much do you think recent financial tightening measures in the U.S. have impacted manufacturing markets, both at home and around the world? 

Written by Paul Tate

Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive

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