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July PMI: US Reaches New High, India Continues Depression, China Steadily Expands
COVID-19 and China
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According to JP Morgan, in July, the global Manufacturing Purchasing Managers’ Index (PMI) rose to a six-month high of 50.3, indicating the global manufacturing sector moved back to the expansion territory. However, for the 28 selected main economies around the world, there are half of them presenting indexes under 50 (<50 represents an economic contraction), where the Chinese close trade partner India on the list at 46.

The PMI of India kept sloping downward under 50 since March. In July the number fell from 47.2 in June, and pointed to a marked deterioration in business conditions across the Indian manufacturing sector. Anecdotal evidence indicated that firms pared back production in line with weaker demand conditions.

The situation for the US is comparably good since the number rises to 50.9, up from 49.8 in the last month, signaling growth in the goods-producing sector after upturns in output and new orders for the first time in 5 months. The sign for recover of the US manufacturing sector might start to show effect in the following months’ consumption.

China is the earliest country to present an expansion PMI thus the increase in July is not as steep as the previous months. In July, the number reached 52.8, rising from 51.2 in June. Manufacturing demand and supply continued to recover, but overseas demand remained subdued.

Editor: Luke Sheehan
ANALYST
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