According to data released by the China Federation of Logistics and Purchasing on the 6th, the global manufacturing PMI in May 2024 was 49.8%, down 0.1 percentage points from the previous month, marking the second consecutive month slightly below 50%.

By region, compared to the previous month, the manufacturing PMI in Asia decreased but remained above 51% for three consecutive months; the European manufacturing PMI increased but remained below 50%; both the Americas and Africa saw various degrees of decline, with PMIs below 50%.

The China Federation of Logistics and Purchasing analyzed that, considering the changes in the comprehensive index, global 

manufacturing continued a trend of mild recovery in May. Asian manufacturing remained stable, the recovery strength of European manufacturing increased, while the recovery strength of manufacturing in the Americas and Africa weakened. From January to May, the average global manufacturing PMI was 49.7%, better than the same period last year but still below the level of 2019. Based on the moderate global economic recovery since the beginning of the year, following the OECD and the IMF, the United Nations Department of Economic and Social Affairs also raised its economic growth forecast, increasing the 2024 world economic growth forecast from 2.4% at the beginning of the year to 2.7%. Meanwhile, the WTO also has a positive outlook for global trade, predicting a gradual recovery in global merchandise trade volumes, with growth of 2.6% in 2024 and 3.3% in 2025. However, it should be noted that geopolitical conflicts, uncertainties in national economic and trade policies, debt crises, and inflationary pressures remain unstable factors disrupting the recovery of the global economy and trade.

The China Federation of Logistics and Purchasing stated that to ensure stable economic recovery, countries worldwide are also striving to accelerate transformation, developing the digital economy, artificial intelligence, and industries related to new drivers of growth. Currently, the development and expansion of new drivers still require time. Before these new drivers play a dominant role in the global economy, and without sudden adverse impacts, the global economy will stabilize within a range of fluctuations. The potential for future global economic growth can only be fully realized in an environment where global supply chains operate smoothly, continuing to promote multilateral cooperation, and eliminating the adverse effects of trade protectionism and geopolitical conflicts, to gradually achieve a steady upward recovery of the global economy.

Africa's Manufacturing Recovery Weakens, PMI Falls Below 50%

In May 2024, Africa's manufacturing PMI was 48.8%, down 1.9 percentage points from the previous month, ending five consecutive months of operating at 49% or above. Among major countries, South Africa's manufacturing PMI fell below 50% with a significant month-on-month decline; Nigeria and Egypt's manufacturing PMIs rose to varying degrees from the previous month.

The data changes indicate that the recovery strength of Africa's manufacturing has weakened, and the recovery trend remains unstable. The significant decline in the growth rate of South Africa's manufacturing is the main factor dragging down Africa's manufacturing recovery. Recently, the World Bank released its Africa economic outlook report, predicting that the economic growth in Sub-Saharan Africa will rebound in 2024, but the outlook remains "unstable." Factors influencing the volatility of Africa's economy mainly include high inflation and debt, political instability, and high external dependency. Despite the fluctuations in Africa's economic recovery, the potential for economic development remains high, with natural resource endowments and demographic dividend advantages serving as the basis for its cooperation with other regions of the world. African countries need to continue enhancing economic recovery resilience through regional cooperation and external openness while maintaining internal stability. The United Nations Economic and Social Council predicts that Africa's economic growth rate will be 3.5% in 2024, second only to Asia.

European Manufacturing Recovery Strengthens, PMI Rises from Previous Month

In May 2024, Europe's manufacturing PMI was 49%, up 1.3 percentage points from the previous month, hitting a new high since February 2023. Among major countries, the manufacturing PMIs of the UK, Russia, Spain, and the Netherlands rose to varying degrees from the previous month, with indices above 50%; Germany and France's manufacturing PMIs, although still below 50%, rose from the previous month by more than 1 percentage point.

The data changes show that the recovery strength of European manufacturing has significantly improved from the previous month, with marginal improvements in the European economy. The European Commission's spring economic outlook report is also optimistic, suggesting that the EU's economic growth is better than expected, predicting that the EU economy will grow by 1% and 1.6% in 2024 and 2025, respectively, and the Eurozone economy will grow by 0.8% and 1.4% in 2024 and 2025, respectively. In terms of inflation trends, the Eurozone CPI in May increased by 2.6% year-on-year, slightly higher than April's 2.4%, but still significantly lower than in 2023. Based on the current inflation trend, the market generally expects the European Central Bank to cut interest rates in June. The market's expectations for the pace of monetary policy easing and interest rate cuts after June may vary depending on their expectations of inflationary pressures. As long as factors such as energy prices and food prices no longer significantly impact European inflation, inflationary pressures in Europe will not rise substantially. The chief economist of the European Central Bank, Philip Lane, believes that even if inflation rebounds this year, it is appropriate to relax monetary policy constraints. This means that the policy focus of the Eurozone is gradually shifting from controlling inflation to promoting economic recovery.

Manufacturing Recovery in the Americas Continues to Weaken, PMI Continues to Decline

In May 2024, the manufacturing PMI in the Americas was 49.1%, down 0.6 percentage points from the previous month, below 50% for two consecutive months and declining month-on-month for two consecutive months. The main country data shows that the manufacturing PMIs of the United States, Brazil, and Canada all fell to varying degrees from the previous month. Among them, Brazil's manufacturing PMI remained above 50%, while the manufacturing PMIs of the United States and Canada were below 50%.

The ISM report shows that in May, the US manufacturing PMI was 48.7%, down 0.5 percentage points from the previous month, below 50% for two consecutive months and declining month-on-month for two consecutive months. The continuous weakening of US manufacturing recovery is the main factor affecting the weakening of manufacturing in the Americas. Changes in sub-indices show that a significant decline in manufacturing demand is the main reason for the weakening of US manufacturing. The new orders index fell to around 45%, with a month-on-month decline of more than 3 percentage points, below 50% for two consecutive months. US manufacturing production activities remained expansive, with the production index falling from the previous month but still above 50%.

The downward revision of the first-quarter growth rate in the US also reflects a weakening of the US economic recovery. The US Department of Commerce's revised first-quarter GDP data shows that the actual GDP annualized quarterly growth rate for the first quarter was 1.3%, down 0.3 percentage points from the initial value of 1.6%, and significantly slower than the 3.4% growth rate in the fourth quarter of last year, marking a new low since the first quarter of 2023. In April, the US CPI year-on-year growth rate remained at 3.4%, still above the Federal Reserve's 2% inflation target, meaning the Federal Reserve may continue to maintain the current interest rate level and delay the pace of interest rate cuts. In this context, US corporate expectations are showing pessimism. The Federal Reserve's Beige Book, which surveys businesses in 12 districts, shows that under increasing uncertain risks and downside risks, businesses are increasingly pessimistic about economic prospects.

Relatively Stable Manufacturing in Asia, PMI Above 51% for Three Consecutive Months

In May 2024, Asia's manufacturing PMI, although down 0.4 percentage points from the previous month, remained at 51.1%, staying above 51% for three consecutive months. Among major countries, China's manufacturing PMI fell below 50%; India's manufacturing PMI declined from the previous month but remained above 57%; among major ASEAN countries, the manufacturing PMIs of Indonesia, Thailand, Singapore, the Philippines, and Vietnam were all above 50%; Japan and South Korea's manufacturing PMIs rose to varying degrees from the previous month.

Overall, Asia's economic resilience is better than other regions, continuing a mild recovery trend. Although China's manufacturing PMI fell below 50%, production maintained an expansion trend, and new energy industries continued to grow rapidly, laying the foundation for stable economic recovery; India's manufacturing maintained rapid growth; major ASEAN countries' manufacturing remained expansive; Japan and South Korea's manufacturing recovery strength improved from the previous month. Under the high-interest rate environment in the US, the depreciation of local currencies puts Asian central banks in a dilemma, bringing uncertainty to Asia's economic recovery. With the continuous advancement of RCEP, maintaining broader trade and investment cooperation among Asian countries is the driving force for stable economic recovery in Asia.

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