CCTV News: According to the China Federation of Logistics and Purchasing, the global manufacturing PMI in December 2023 was 48%, the same as the previous month, and it has been running below 50% for 15 consecutive months. In 2023, the average global manufacturing PMI will be 48.5%, down 3.3 percentage points from 2022, and the average monthly operation will be below 50% throughout the year, and the global economic growth momentum will slow down compared with 2022. In terms of sub-regions, in 2023, the average manufacturing PMI in Asia will be 50.7%, the same as in 2022, showing strong growth resilience, the average manufacturing PMI in Africa will be 48.8%, down 1.9 percentage points from 2022, and the growth rate of the manufacturing industry in Africa will also slow down compared with 2022 under the influence of the weak global economic recovery, and the average manufacturing PMI in the Americas will be 47.5% , down 5.6 percentage points from 2022, the impact of continuous interest rate hikes on the U.S. manufacturing industry, becoming the main factor dragging down the recovery of the manufacturing industry in the Americas, and the average European manufacturing PMI was 46.3%, down 5.6 percentage points from 2022, showing that the European manufacturing industry continued to be weak under the influence of geopolitical conflicts and continuous interest rate hikes.
Based on data changes, under the influence of inflationary pressures and geopolitical conflicts, the global economy will show a weak recovery stability in 2023 and a lack of recovery momentum. From the perspective of quarterly index changes, the global manufacturing industry showed a temporary recovery in the first quarter, and the economic recovery momentum in the remaining quarters showed a trend of fluctuating and weakening. The average global manufacturing PMI in the first, second, third and fourth quarters of 2023 will be 49.4%, 48.2%, 48.3% and 47.9% respectively. Based on the continued weakening momentum of the global economic recovery, major institutions in the world generally believe that the economic growth rate in 2024 will still be slightly lower than that in 2023. The uncertain impact of geopolitical conflicts such as the Russia-Ukraine war, the Palestinian-Israeli conflict, and the maritime situation around the Red Sea on global trade will continue to be the main factors plaguing the global economic recovery in 2024, and the stability of the global industrial and supply chains will still be challenged.
In 2024, whether the global economic recovery can improve beyond expectations needs to focus on the following aspects. The first is the evolution of inflation in major countries such as Europe and the United States, if the inflation level in Europe and the United States and other countries falls to near the target level, the monetary policy of Europe and the United States will usher in an inflection point, from interest rate hikes to interest rate cuts, which will have a positive impact on the global economic recovery; second, the degree of economic and trade cooperation between countries in the world, the resilience of the Asian economy will benefit from the continuous strengthening of regional economic and trade cooperation, and the recovery of the global economy also needs stable cooperation between regions, the more multilateral cooperation, the stronger the momentum of economic recovery; third, global digital and green development is expected to bring new growth points to the global economic recovery; fourth, if the geopolitical conflict is significantly improvedThe stability of the global industrial chain and supply chain will be significantly improved, which will be conducive to the sustainable recovery of the global economy.
The European manufacturing sector was little volatile, with the PMI unchanged from the previous month
In December 2023, the European manufacturing PMI was 45.8%, unchanged from the previous month, but the index level remained below 50% for 17 consecutive months, indicating that the European manufacturing industry did not fluctuate much compared with the previous month, but it still did not change the weak operating trend. From the perspective of major countries, the manufacturing PMI of Germany, the United Kingdom, France and Spain fluctuated little from the previous month, and all remained at a low level.
In 2023, Europe's manufacturing sector continued to be weak, with weak demand and continued monetary tightening leading to a lack of momentum in European investment, consumption, and exports. In the first half of 2024, the European economy will continue to be weak under the continued impact of weak endogenous growth. In the second half of 2024, if inflationary pressures in Europe continue to ease, the European economy may usher in a moderate recovery with the shift in European monetary policy. From the perspective of fiscal policy, the current deficit rate of the eurozone is 3.6%, which is already above the ceiling set by the EU's fiscal rules. Geopolitical conflicts have largely constrained the EU's fiscal spending. If the conflict does not ease, it will pose new challenges to EU fiscal policy.
The decline in the manufacturing sector in the Americas narrowed, and the PMI rose slightly from the previous month
In December 2023, the manufacturing PMI in the Americas was 47.6%, an increase of 0.4 percentage points from the previous month, and the decline in the manufacturing industry in the Americas narrowed from the previous month, but it was still below 50% for 14 consecutive months. According to the data of major countries, the manufacturing PMI of Mexico and Brazil decreased to varying degrees from the previous month, while the manufacturing PMI of Colombia and the United States increased to varying degrees from the previous month.
According to the ISM report, in December 2023, the decline in the U.S. manufacturing industry narrowed, with the manufacturing PMI at 47.4%, up 0.4 percentage points from the previous month and below 50% for 14 consecutive months. Changes in the sub-indices show that the U.S. manufacturing production activity has stopped falling and resumed its upward trend, with the production index rising to more than 50 percent, while demand is still weak and the decline has expanded, and the new orders index has fallen from the previous month to about 47 percent. In 2023, under the influence of continuous interest rate hikes in the United States, the U.S. manufacturing industry will continue to weaken, and the average U.S. manufacturing PMI in 2023 will be 47.1%, down 6.4 percentage points from 2022. In 2024, the U.S. government will continue to weigh inflationary pressures against economic recovery. In November 2023, the US CPI rose by 3.1% year-on-year, 0.1 percentage points narrower than in October, but the core CPI was still at 4%, with little change from before. Although the market generally believes that the US interest rate hike cycle is over, the Fed still leaves room for its statement, saying that it still needs to carefully assess the inflation level, after all, it is still far from the 2% inflation target. The Fed's latest economic outlook forecast for the U.S. economy continues to slow in 2024, with an expected growth rate of 1.4% in 2024, which will be lower than the expected growth rate of 2.6% in 2023. In 2024, if U.S. inflationary pressures can continue to cool, then the Fed chooses to cut interest rates, which will have a positive impact on the recovery of the U.S. economy. The timing and intensity of interest rate cuts determine the timing and intensity of the U.S. economic recovery.
The decline in Africa's manufacturing sector has narrowed significantly, and the PMI has risen
In December 2023, the African manufacturing PMI was 49.8%, up 1.8 percentage points from the previous month, rising month-on-month for two consecutive months, indicating that the decline in Africa's manufacturing industry continued to narrow significantly. From the perspective of major countries, the manufacturing PMI of Nigeria and Egypt increased to varying degrees from the previous month, of which the manufacturing PMI of Nigeria rose to more than 50%.
At the index level, the recovery of Africa's manufacturing sector in 2023 will be weaker than that of Asia, but better than that of Europe and the Americas. Under the influence of the lack of momentum in the global economic recovery, the recovery of Africa's manufacturing industry is weaker than in 2022. In addition to relying on the global economic recovery, the accumulation of endogenous growth momentum of the African economy also determines the strength of its recovery in 2024. Africa still has the advantages of demographic dividend and natural resource endowment, the rapid development of the digital economy has also brought new growth points to Africa's economic recovery, and the continued promotion of the African Continental Free Trade Area will help improve the economic structure of Africa, optimize the trade environment of Africa, and enhance the quality of Africa's economic development.
Asia's manufacturing sector has slowed and PMIs have declined
In December 2023, the Asian manufacturing PMI was 49.8%, down 0.5 percentage points from the previous month, ending the 11-month running trend of more than 50%, indicating that the growth rate of Asia's manufacturing industry slowed down from the previous month. From the perspective of major countries, China, Japan, South Korea and India manufacturing PMI all decreased to varying degrees from the previous month; among ASEAN countries, Thailand, the Philippines and Myanmar manufacturing PMI all decreased to varying degrees from the previous month, and Indonesia, Malaysia and Singapore manufacturing PMI were relatively stable.
From the perspective of the annual level, the overall growth trend of Asia's manufacturing industry is better than that of Europe, the Americas and Africa. The average Asian manufacturing PMI in 2023 is still 50.7%, the same as last year, showing that Asia's economic growth is relatively resilient. The world's major institutions are expecting Asia's economic growth to be better than that of other continents, and Asia's contribution to global economic growth is gradually increasing. A relatively stable development environment and the gradual strengthening of regional cooperation are important guarantees for the resilience of the Asian economy. The Asian Development Bank's latest report expects developing economies in Asia and the Pacific to grow by 4.9 percent in 2023, up 0.2 percentage points from its previous forecast, and to keep its forecast unchanged at 4.8 percent in 2024. In 2024, the Asian economy will remain resilient. China's economy will continue to stabilize and rise while adhering to the principles of seeking progress while maintaining stability, promoting stability through progress, and establishing first and then breaking down, and will remain the main driving force for the stable recovery of the Asian economy.
Source: CCTV