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Decline in Global Factory Activity Eases

This article is published in collaboration with Statista

by Willem Roper

Factories around the world shut down as manufacturing demand fell and workers stayed home due to COVID-19 restrictions. Now, new indices measuring manufacturing output are showing signs that the recovery may be beginning for some of the top industrial countries in the world.

In a range of indices measured by IHS Markit, Caixin and Jibun Bank in Japan, Italy, Germany and the U.S. all showed positive gains to manufacturing following a rough start to 2020. China, the first country to gain traction in limit the spread of COVID-19 in their country, crossed back over the expansion threshold with an IHS index score above 50 for May, but missed the important mark again in June. Countries that felt the brunt of COVID-19 later than China, like Italy, Germany and the U.S., are finally seeing growth but are still in the contraction zone.

Japan, on the other hand, continues to sink into a deeper recession, and manufacturing is continuing to take a negative downturn. In June, the Jibun Bank PMI reached 37.8 index points - an 11-year low.

The U.S. was also coming off an 11-year low in factory activity in April, and while the uptick in manufacturing points to a possible recovery, many economists expect a long road ahead before the damage from COVID-19 lockdowns is reversed. June numbers point to a continued recovery, however ongoing protests over racial discrimination and police brutality along with rising COVID-19 cases may further set back economic recoveries as businesses refuse to open.

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