The J.P. Morgan Global Manufacturing PMI composite index said manufacturing on a global scale had expanded in July for the first time since January, buoyed by recoveries in demand and production.
“The July PMI indicates that the recovery which began in May continued into mid-summer,” Olya Borichevska, global economist at J.P.Morgan, said in a statement. “Many of the PMI components reached their pre-pandemic levels for the first time in July including output and new orders [but] to fully recoup the losses sustained in the first half of the year will still take some time, especially if the recovery is knocked off course by any future re-tightening of restrictions.”
It was the fastest output growth since December 2018, as manufacturing continues to rebound from the global pandemic and worldwide recession, wrote Chad Moutray, chief economist with the National Association of Manufacturers.
Manufacturers expressed cautious optimism about future production, as sentiment among the top 10 markets for U.S.-manufactured products improved in every economy in July.
“Despite recent progress, manufacturers still need to dig out of a deep hole globally, with industrial production well below the pre-pandemic pace,” wrote Moutray in a brief. “Industrial production data in several markets reflect this.”
For example, TradeStats Express reported that U.S.-manufactured goods exports totaled $566.92 billion through the first six months of 2020, dropping 17.35 percent (from $685.93 billion), in the first half of 2019.
Meanwhile, the U.S. trade deficit declined from $54.8 billion in May — its highest point since December 2018 — to $50.7 billion in June.
The U.S. dollar has also fallen 5.2 percent compared to a broad index of currencies, according to the Federal Reserve.
However, manufactures continue to cite a strong dollar as a challenge, both to their earnings and for increasing international demand, said Moutray.