Index continues to pullback, global economic recovery trend fluctuates

According to the China Federation of Logistics and Purchasing, in October 2018, the global manufacturing PMI fell 0.9 percentage points from the previous month to 53.4%, setting a new low for the year and falling for two consecutive months. In view of different regions, the manufacturing PMI in Asia, Europe, America and Africa showed a continuous downward trend. An index level of over 53% indicates that the rapid growth trend of global manufacturing is still continuing, but the index continues to pull back and hit a new low, indicating that global manufacturing growth continues to slow and the global economic recovery trend fluctuates. In the latest economic outlook report, the IMF lowered its economic growth forecast for 2018 and 2019.

The fluctuation of the global economic recovery trend has its inherent factors. This round of global economic recovery has lasted for two years since the second half of 2016. The momentum of sustained economic growth objectively fluctuates and will not remain strong. At the same time, the increasingly complex international political and economic situation has brought greater downward pressure on the global economy. First, the normalization of the global monetary policy region and the change in the environment of continued easing; second, the continued impact of geopolitics on the global economy; third, the continued rise in the prices of oil-based commodities, which objectively raises the economic operating costs; Fourth, the impact of trade friction on the global economy continues to ferment, becoming an important factor that has recently disturbed global economic growth. In this environment, strengthening regional cooperation, promoting trade liberalization and diversified development strategies have gradually become the main options for countries around the world to avoid economic downside risks. The “Belt and Road” initiative launched by China has played a good role in promoting it.

From a regional perspective, the following characteristics are presented:

The growth of Asian manufacturing industry is stable, PMI fell slightly

In October 2018, the Asian manufacturing PMI retreated for two consecutive months, falling to 51.2%, but the decline was only 0.2 percentage points. Since this year, the index has continued to stabilize at over 51%, indicating that the growth momentum of the Asian manufacturing industry is still relatively stable.

The relative stability of Asian manufacturing has played a good role in alleviating the economic downturn and maintaining the trend of global economic expansion. There are many emerging market countries and developing countries in Asia, and their influence on the global economy is gradually increasing. These countries have great development potential, and the process of industrialization and urbanization is still continuing. In particular, the power base for consumption upgrade is relatively strong, which has become the main factor for maintaining the stability of the Asian economy. As a major developing country, China is one of the foundations for its stable development is the continuous release of domestic consumption potential. This month's decline in China's manufacturing PMI is more due to the continued decline in external demand. Domestic supply and demand have remained good, high-tech industries have accelerated growth, companies have confidence in the market outlook, and the economy has maintained steady growth.

The growth rate of European manufacturing continues to decline, with a significant decrease in PMI

In October 2018, the European manufacturing PMI fell for three consecutive months, down 0.8 percentage points month-on-month, to a new annual low of 52.0. The manufacturing PMI of most European countries has declined to varying degrees. Among them, the major economic powers such as Germany, the United Kingdom and France have experienced significant declines, all of which have fallen by more than 1 percentage point.

From the perspective of index changes, except for a slight increase of 0.1 percentage points in July, the overall European manufacturing PMI this year showed a month-by-month slowing trend, indicating that although the European manufacturing industry still maintains growth, the continued downward trend is more obvious. Intensified geopolitical risks, continued fermentation of the debt crisis, Brexit faces uncertainty and the existence of the negative effects of recent trade frictions, which have jointly inhibited the European recovery process. In response to the current economic situation in the European region and the uncertainty of future economic development, forecasters surveyed by the European Central Bank generally lowered the euro zone's economic growth forecast next year.

The strong recovery of the manufacturing industry in the Americas slowed down, and PMI continued to fall

In October 2018, the PMI of the American manufacturing industry fell for two consecutive months, a drop of 1.8 percentage points from the previous month, but it remained at 56.6%. Index changes mean that the manufacturing industry in the Americas still maintains a strong recovery trend, but the growth rate has slowed down. From the perspective of major countries, Brazil's manufacturing PMI rebounded slightly, while Mexico and Canada declined to varying degrees. The high correction of the US manufacturing PMI has dominated the slowdown in the recovery of the American manufacturing industry.

The ISM report shows that the U.S. manufacturing PMI fell 2.1 percentage points from last month to 57.7%. The sub-index shows that the growth rate of US production activities and market demand has slowed down. The index has ended the continuous trend of more than 60%, but it has remained at more than 57%. Along with the slowdown in the growth of supply and demand, the growth rate of employment in the United States has also slowed down. The employment index fell by 2 percentage points from the previous month, but it still remained above 56%. Enterprise surveys show that US companies continue to pay attention to the impact of trade frictions. First, it is reflected in the problem of tight supply of raw materials caused by the increase of tariffs, and the supply chain is delayed, which cannot meet the market demand in a timely manner. Second, it is reflected in the cost problem caused by the increase of tariffs. Increased the company's operating costs. The U.S. manufacturing purchase price index rebounded to more than 70% this month. Comprehensive index changes, the US manufacturing industry still maintains strong growth, and the continuous pullback of the index means that the strong growth momentum has weakened.

The growth rate of Australian manufacturing slowed down slightly, PMI retreated at a high level

In October 2018, the Australian manufacturing PMI ended its upward trend for two consecutive months, a slight decrease of 0.7 percentage points from the previous month, but it remained at 58.3%. It shows that the growth of Australian manufacturing is still strong, and the growth rate has slightly slowed down from last month. The strong performance of the Australian manufacturing industry has strongly supported Australia's economic development. As for the increasingly complex international trade environment, Australia has also put forward the idea of ​​continuing to adhere to trade liberalization, trying to avoid the hidden dangers caused by trade friction. At the same time, the continued decline in the Australian property market has also brought greater uncertainty to the development of the Australian manufacturing industry and needs to pay attention to subsequent changes.

The growth rate of African manufacturing is flat, PMI remains in the expansion range

In October 2018, the African manufacturing PMI was 50.2%, which was the same as last month and the same period last year, but lower than the average level of the third quarter, indicating that the African manufacturing industry maintained growth and the growth rate was the same as last month, but the overall growth level was weak . Among the major countries, Nigeria, which accounts for a relatively large number of manufacturing industries, is booming and maintains strong growth.

African economic development mainly depends on the sustained growth of the global economy. Fluctuations in the global economic recovery trend have affected the growth of African manufacturing to some extent. However, Africa's economic development potential is still large. From the external environment, the continued cooperation with Africa, including China and some European countries, has brought more room for economic development in Africa. From the internal environment, the political environment in the African region has stabilized, and the demographic dividend is showing. Under the combined influence of internal and external factors, the African economy is expected to continue to recover. Since the beginning of this year, the level of the African manufacturing PMI index has increased from the same period last year, with an average of 52% from January to October, an increase of 3 percentage points from the same period last year.