According to the China Federation of Logistics and Purchasing, the global manufacturing PMI in March 2022 was 54.1%, down 0.8 percentage points from the previous month and 3.7 percentage points from the same period last year. From a sub-regional point of view, the manufacturing PMI in Asia, Europe, the Americas and Africa all fell to varying degrees compared with the previous month, and the european manufacturing PMI fell most significantly.

The index changes show that under the dual impact of the epidemic and geopolitical conflicts, the growth rate of the global manufacturing industry has slowed down, facing short-term supply shocks, demand contraction and weaker expectations. From the supply point of view, geopolitical conflicts have exacerbated the supply impact problem originally caused by the epidemic, the price of bulk raw materials mainly energy and grain has increased inflationary pressures, and supply cost pressures have risen; geopolitical conflicts have led to the obstruction of international transportation and the decline in supply efficiency. From the perspective of demand, the decline in global manufacturing PMI reflects the problem of demand contraction to a certain extent, especially the manufacturing PMI in Asia, Europe, the Americas and Africa has declined, which means that the demand contraction problem is a common problem facing the world in the short term. From the perspective of expectations, in the face of the combined impact of the epidemic and geopolitical conflicts, international organizations have lowered their economic growth forecasts for 2022. The United Nations Conference on Trade and Development recently released a report that lowered its 2022 global economic growth forecast from 3.6% to 2.6%.

      In March 2022, the African manufacturing PMI fell by 2 percentage points from the previous month to 50.8%, indicating that the recovery rate of African manufacturing has slowed down from the previous month. The COVID-19 pandemic has brought challenges to Africa’s economic development. At the same time, the Fed’s interest rate hikes have also led to some outflows. Some African countries have struggled to stabilize domestic funding through interest rate hikes and requests for international assistance.

Manufacturing in Asia continues to slow, with PMI continuing to decline slightly

       In March 2022, the Asian manufacturing PMI fell by 0.4 percentage points from the previous month to 51.2%, a slight decline for four consecutive months, indicating that the growth rate of Asian manufacturing industry showed a continuous slowdown trend. From the perspective of major countries, due to short-term factors such as the spread of the epidemic in many places and geopolitical conflicts, the correction in China’s manufacturing growth rate is the main factor in the slowdown in The growth rate of The Asian manufacturing industry. Looking forward to the future, the basis for the stable recovery of China’s economy has not changed, and many industries have gradually entered the peak season of production and marketing, and there is room for market supply and demand to rebound. With the coordinated efforts of a number of policies, the effect of stable support for the economy will gradually appear. In addition to China, the impact of the epidemic on other asian countries is also larger, and the manufacturing PMI in South Korea and Vietnam has also dropped significantly compared with the previous month. 

      In addition to the impact of the epidemic, geopolitical conflicts and inflationary pressures are also important factors plaguing the development of emerging Asian countries. Most Asian economies import a large share of energy and food, and geopolitical conflicts have exacerbated the rise in oil and food prices, pushing up the operating costs of Asia’s major economies. The Fed has begun a cycle of interest rate hikes, and there is a risk of money flowing out of emerging countries. Deepening economic cooperation, expanding common economic interests, and tapping the maximum potential of regional growth is the direction of Asian countries’ efforts to resist external shocks. RCEP has also brought new impetus to Asia’s economic stability.

Downward pressure on the European manufacturing industry has emerged, and the PMI has fallen significantly

        In March 2022, the European manufacturing PMI was 55.3%, down 1.6 percentage points from the previous month, and the decline was extended from the previous month for two consecutive months. From the perspective of major countries, the growth rate of manufacturing in major countries such as Germany, the United Kingdom, France and Italy has slowed down significantly, and the manufacturing PMI has dropped significantly compared with the previous month, the German manufacturing PMI has dropped by more than 1 percentage point, and the manufacturing PMI of the United Kingdom, France and Italy has dropped by more than 2 percentage points. The Russian manufacturing PMI fell below 45%, a drop of more than 4 percentage points.

      From the perspective of index changes, under the dual influence of geopolitical conflicts and the epidemic, the growth rate of European manufacturing industry has slowed down significantly compared with last month, and the downward pressure has increased. The ECB cut the eurozone’s economic growth forecast for 2022 from 4.2 percent to 3.7 percent. The report of the United Nations Conference on Trade and Development projects a significant slowdown in economic growth in parts of Western Europe. At the same time, geopolitical conflicts have led to a marked increase in inflationary pressures in Europe. In February 2022, inflation in the euro area rose to 5.9 percent, a record high since the euro was born. The ECB’s policy “balance” has shifted more towards increasing inflation upside risks. The ECB has considered further normalizing monetary policy.

Manufacturing growth in the Americas has slowed and PMI has declined 

       In March 2022, the Manufacturing PMI in the Americas fell 0.8 percentage points from the previous month to 56.6%. Data from major countries show that the manufacturing PMI of Canada, Brazil and Mexico has risen to varying degrees compared with the previous month, but the US manufacturing PMI has declined from the previous month, with a decline of more than 1 percentage point, resulting in an overall decline in the PMI of the American manufacturing industry.

        The index changes show that the slowdown in the growth rate of the US manufacturing industry compared with the previous month is the main factor in the slowdown in the growth rate of the manufacturing industry in the Americas. The ISM report shows that in March 2022, the U.S. manufacturing PMI fell 1.5 percentage points from the previous month to 57.1%. Sub-indexes show that the growth rate of supply and demand in the US manufacturing industry has slowed down significantly compared with the previous month. The index of production and new orders fell by more than 4 percentage points. Companies report that the U.S. manufacturing sector is facing contracted demand, domestic and international supply chains being blocked, labor shortages, and rising raw material prices. Among them, the problem of price increases is particularly prominent. The Fed’s assessment of inflation risk has also gradually changed from an initial “temporary” to “the inflation outlook has deteriorated significantly.” Recently, the Federal Reserve lowered its economic growth forecast for 2022, sharply lowering its gross domestic product growth forecast to 2.8% from the previous 4%. 

Multi-factor superposition, China’s manufacturing PMI fell back to the contraction range

     Data released by the National Bureau of Statistics on March 31 showed that in March, China’s manufacturing purchasing managers’ index (PMI) was 49.5%, down 0.7 percentage points from the previous month, and the overall prosperity level of the manufacturing industry fell. Specifically, the production and demand ends are simultaneously lower. The production index and the new orders index fell by 0.9 and 1.9 percentage points respectively from the previous month. Affected by the recent sharp fluctuations in international commodity prices and other factors, the purchase price index and ex-factory price index of major raw materials were 66.1% and 56.7%, respectively, higher than 6.1 and 2.6 percentage points last month, both rose to nearly 5-month highs. In addition, some of the surveyed enterprises reported that due to the impact of the current round of epidemic, the arrival of personnel was insufficient, logistics and transportation were not smooth, and the delivery cycle was extended. The supplier delivery time index for this month was 46.5%, down 1.7 percentage points from the previous month, and the stability of the manufacturing supply chain was affected to some extent.

        In March, the PMI of high-tech manufacturing was 50.4%, which was lower than the previous month, but continued to be in the expansion range. The high-tech manufacturing employees index and the business activity expectation index were 52.0% and 57.8%, respectively, higher than the overall manufacturing industry of 3.4 and 2.1 percentage points. This shows that the high-tech manufacturing industry has a strong development resilience, and enterprises continue to be optimistic about the future market development.