Logistics business: Investor confidence shows signs of life

Economic activity in the manufacturing sector is gradually surging. Investors, too, seem to be responding to this positive news.

By ·

Economic activity in the manufacturing sector is gradually surging. Investors, too, seem to be responding to this positive news.

The JP Morgan Global Manufacturing PMI fell slightly from April’s near-record high of 57.8 to 57.2 in May. Although signaling a slight easing in the overall rate of expansion, this was still the second-fastest rate of growth during the past six years.

Manufacturing output expanded for the twelfth consecutive month in May. Although the rate of increase eased from April’s 75-month high, it was amongst the fastest recorded in the survey history. Rates of expansion in manufacturing production held up well in the U.S., Japan and the UK, staying close to recent highs in both the U.S. and the UK and accelerating to a five-month peak in Japan. Growth eased sharply in the Eurozone and the Asia (excluding Japan) regions.

In the euro area, the rate of expansion in output remained well above its long-run survey average despite the rate of growth easing to the greatest extent during that history. This reflected not only a steep slowdown in Germany, but also weaker growth in the other euro area nations covered and an accelerated pace of decline in Greece.

May saw a similar modest easing in growth of global manufacturing new orders following the six-year high reached in April. New export orders continued to rise at a rapid pace. Almost all of the nations for which data were available reported an increase in new work received, but in most cases the rate of expansion was slower than in April.

Greece was the only nation to report a decline in new orders. However, growth in the US held steady at the previous month’s elevated pace, while Japan saw new orders rise at the fastest pace since last October (albeit still slower than the global average).

Global manufacturing employment increased for the fifth successive month in May, with jobs added at the fastest pace in six years. The sharpest growth in staffing levels was recorded in the US. Employment rose in Japan, the Asia (excluding Japan) region and, for the first time in two years, the Eurozone.

Cost inflation remained elevated in the global manufacturing sector. Input prices have now risen in each month since last August, with the latest rate of increase only slightly below April’s twenty-month peak. Higher purchasing costs reflected increased
commodity prices, rising demand for raw materials and supply-chain factors.

The latter was further highlighted by PMI data on supplier performance. May saw a further marked lengthening in vendor lead times. The extent of the deterioration in performance in recent months has been exceeded in only one period – March to June 2004 – in the global survey history.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
B2B Sellers Prefer a Unified Approach for Ecommerce
A new study from Forrester Consulting, commissioned by NetSuite, found that many midmarket, B2B sellers say their ecommerce solutions have contributed to their growth in sales, new customer acquisitions and improved customer relationships.
Download Today!
From the August 2016 Issue
A growing number of low-cost lift trucks offer new avenues for pairing equipment and applications, but less cautious buyers might find that small up-front costs come at a steep price. Selecting the proper lift truck, lift truck tips 2016, Choosing the right Lift Truck
Megatrends in ocean freight
Ocean Cargo Roundtable: What’s in store for 2017?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...

Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....
Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...