Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

JP Morgan’s global manufacturing Purchase Manager’s Index (PMI) expanded to 50.3 in July, from 47.9 in June. The index reached above 50 levels for the first time since January. International trade volumes fell at a slower pace, supporting output and new orders.


The rate of expansion in July was sharpest since the end of 2018 according to the report published in partnership with IHS Markit. Of the 27 nations considered for the index calculation, 13 achieved PMIs above the 50 thresholds which point at expansion. PMI in Russia and India, however, contracted. 


Output index increased to 51.4 in July from 47.3 in June, up 4.1 points. New Orders increased by 3.9 points to 50.7 in July from 46.8 in June. Future output index increased marginally by 0.7 points to 59.6 in July from 58.9 in June. Inflation is of a concern as the input price index increased by 1.4 points to 53 in July from 51.6 in June. The rise is in tandem with the output price index which also increased by 1.4 points to 50.9 in July from 49.5 in June. 


New orders and employment indexes remain below 50. The New Export Orders index increased by 3.4 points to 46.9 in July from 43.5 in June while the employment index increased by 1.1 points to 47.1 in July from 46 the prior month. 



China’s Composite Output Index, weighted average between manufacturing and services indices, continued to be in the growth spectrum at 54.4 in July but fell from 55.7 in June. The mild decline reflected a slightly weaker services side expansion while manufacturing output rose to the strongest level since January 2011. Input costs rose at the strongest pace since November 2018. Employment levels fell slightly in both, the manufacturing and service sectors. 



Japan’s Composite Output Index increased to 44.9 in July from 40.8 in June. The service sector index in July was at 45.4 while the index for manufacturing was subdued at 43.9.

Though July recorded the highest reading since February, a number lower than 50 reflects a slight economic constriction. Japan has been confronting economic challenges with the index below 50 for six successive months. 



ASEAN manufacturing PMI rose to 46.5 in July to 43.7 in June to signal a slower growth decline. July encountered declines in both, output and new orders. The PMI has remained below 50 for five successive months. Domestic demand has been driving activity as export orders fell. Employment losses were recorded for the fourteenth month. Vietnam had a PMI of 47.6 while the Philippines achieved a PMI of 48.4 continuing the contraction with only Myanmar at 51.7, above the 50 mark which separates contraction from expansion. Employment declines continued in the region while the downturn in export sales eased. 



The Eurozone manufacturing PMI increased by 4.4points to 51.8 from June’s final 47.4 level. Severe unemployment continues as firms operate below capacity but gains in output and new orders boosted July’s PMI. In July, five countries rose above the 50 levels with Spain at 53.5, Austria at 52.8, France at 52.4, Italy at 51.9, and Germany at 51. Greece and the Netherlands remained in the contraction zone at 48.6 and 47.9, respectively. 


Most manufacturers cut purchases in July and preferred consuming existing inventories for production. The reluctance in purchases was also partially driven by supply-side delays. July’s lead times deteriorated for a sixth successive month. Input prices and output charges remained inside the deflationary level. 


Confidence continued to recover in July for the 12-month outlook. A broader recovery from the pandemic in the period could strengthen present weak demand and loosen competitive pressures.



Russia’s Manufacturing PMI declined by 1 point to 48.4 in July from 49.4 in June. Output increases were marginal for the second month. The rate of input price inflation accelerated as production schedules picked up and met shortages of raw materials and unfavorable exchange rates on imported goods. Firms resorted to the consumption of pre-production inventories due to longer lead times and higher prices. Selling prices rose marginally compared to the input, given the weak demand. 


Demand conditions, amid a slowly recovering period, remained weak. Uncertainty influenced by the pandemic led to clients delaying orders or limiting the size of orders. New export orders contracted in July, a consistent trend since May 2019.



India’s Manufacturing PMI fell by 1.2 points to 46 in July from 47.2 in June. Output contracted further amid COVID-19 as firms decelerated production due to weaker demand conditions. Sales declined due to prolonged closures resulting in limited new orders. Export orders also weakened amid uncertainty.


Weaker new orders resulted in reduced purchasing activity in July for the fifth month. Input prices continued to decrease in July, though, at a slower pace than in the last four months. Sentiment for the next 12-months increased for a second successive month on improved business outlook. 

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