China Federation of logistics and purchasing pointed out that the change of comprehensive index continued the downward trend of global manufacturing industry in May, and the slowdown was slower than last month. In the face of the impact of the epidemic, countries around the world continue to increase monetary and fiscal policy support to ensure economic recovery and business operation. However, the effect of these policies can be better brought into play with the gradual control of the epidemic. In the absence of effective control of the epidemic, the global manufacturing PMI will remain low and fluctuate repeatedly.
From the perspective of the subregion, it has the following characteristics:
First, the decline of European manufacturing industry slowed down and the PMI low rebounded.
In May 2020, PMI of European manufacturing industry ended two consecutive months of downward trend, up 6.5 percentage points to 40.1% compared with last month, but it is still significantly lower than the level in March and the same period last year, which means that European manufacturing industry is still in a downward trend, but the rebound of PMI also shows that the rapid downward trend of European manufacturing industry has been contained. The manufacturing PMI of Germany, France, Britain and Italy all recovered to some extent, but the index was low.
The implementation of the measures has made manufacturing industry in European countries recover slightly, but slowly. In the second quarter, when the epidemic is not under full control, it is difficult for the European economy to recover significantly. In order to cope with the impact of the epidemic, European countries are trying to control the epidemic, at the same time, they are planning to return to work on a larger scale, and gradually introduce more stimulus policies to alleviate the continuous decline of the economic situation. The EU is expected to continue to increase its bond buying in June. In order to recover the economy after the outbreak, the EU is also planning to take measures to absorb more manufacturing industry and reduce the external dependence of the supply chain. Some countries, such as the United Kingdom, are working out employment plans to cope with possible unemployment.
Second, the manufacturing industry in the Americas continued to decline, and the PMI level picked up.
The recovery of the U.S. economy remains the focus of the worlds attention. The ISM report shows that the manufacturing PMI in the United States rose to 43.1% in May from 41.5% in April, indicating that the downward trend of the U.S. economy has been contained, but the overall trend remains weak. The sub index shows that the production, demand and employment activities of manufacturing industry in the United States remain weak. Although the relevant index rebounded from last month, they are all below 40%.
The U.S. economy is expected to fall into a severe recession in the first half of the year and recover in the second half. The control rhythm of the epidemic will be the key factor to determine the time and intensity of economic recovery in the United States. There are still disagreements within the United States about the priority of epidemic prevention and economic recovery. The recurrence of the epidemic and the default of corporate debt will become a potential threat to the U.S. economy. In response to the outbreak, the Federal Reserve said it would launch a mass enterprise loan program to support SMEs affected by the outbreak and continue to use all available tools to support the economy. The unlimited quantitative easing policy adopted by the United States has stabilized the financial market in the short term, but in the long term it will increase the debt repayment risk of the U.S. government and enterprises.
Third, Africas manufacturing industry recovered slightly, with the index still below 50%.
In May 2020, African Manufacturing PMI rose 3.3 percentage points to 44.2% compared with the previous month, ending the four consecutive month on month decline, down 7.2 percentage points compared with the same period last year. The manufacturing PMI of Nigeria, which accounts for a large proportion of economic volume, fell from last month, while the manufacturing PMI of other countries rebounded to some extent from last month. Data changes show that under the continuous impact of the epidemic, African manufacturing industry has recovered from last month, but continues to maintain a weak operation. The novel coronavirus pneumonia epidemic has a significant impact on the original development momentum of Africa. The African economy which had been dependent on mineral resources and external investment has been greatly affected. The PMI of manufacturing industry has dropped significantly compared with the same period last year, running below 50% in 3 consecutive months. African countries have strengthened their willingness to sign the African free trade area as soon as possible, hoping to eliminate the restrictions on the free flow of emergency supplies and necessities in the region through the establishment of the free trade area.
Fourth, Asian manufacturing is relatively good, but the index remains low.
In May 2020, Asian manufacturing PMI rose 0.5 percentage points to 44.3% from last month, slightly higher than other regions. From the perspective of major countries, Chinas manufacturing PMI has been stable at more than 50% for two consecutive months; Japan and South Koreas manufacturing industry have been affected by the epidemic, which has been repeated. Manufacturing PMI has fallen from the previous month and kept at a low level; most other countries manufacturing PMI has risen to different degrees from the previous month, but the index has remained at a low level below 50%. According to the change of the comprehensive index, except that Chinas economy maintained a recovery and recovery trend when the epidemic was under effective control, other countries were affected by the epidemic, and their economy remained weak with little recovery. In comparison, Asias economic growth is expected to be better than that of other regions. In particular, driven by Chinas sustained restorative growth and through international cooperation, it is expected to accelerate the recovery of Asian economy. Chinas one belt, one road initiative has become an important driving force for the recovery of international trade. (Zhongxin Jingwei APP)