According to the global Purchasing Managers' Index (PMI) from JP Morgan and Markit Economics, global manufacturing has grown for the past six months.
As the SMH reports, the global PMI index for June was 50.6. This included “solid rates of expansion” in the US, Japan, UK, Russia, Switzerland and Mexico. (readings below 50 indicate a contraction in activity).
Meanwhile, the downturn in eurozone countries eased further and the manufacturing sectors in China, Taiwan, South Korea and Vietnam contracted in June.
Here in Australia, the manufacturing sector nudged growth in June. The June PMI was 49.6 – up 5.8 points from the figure for May.
The improvement in the overall reading was largely due to an expansion in production (50.2) from the previous month, and improvements in the new orders index (49.9) and supplier deliveries (49.6).
However, despite falls in the Australian dollar, manufacturing exports continued to struggle.
According to Peter Dragicevich, a currency strategist at Commonwealth Bank, China's slowing growth and the fall in its PMI is a concern. However, China’s economy is still expanding at a robust pace.
"China's slowing from the unsustainable rates that it was growing at over the last few years to more a sustainable level, which is actually a good thing for Australia over the long term," he said.
"The medium-term outlook for China is still quite positive. There is a lot of urbanisation left to occur and that's a big level of support for commodity demand for Australia."
The US PMI for manufacturing rose to 50.9 in June. This represents an increase of 1.9 points over the May figure of 49.