S&P: Global trade flows drag down manufacturing output

Global trade flows negatively impacted manufacturing production in September 2024, with new export orders declining at the fastest rate in 11 months. PMI data indicated a potential 3-4 per cent year-on-year drop in global trade volumes.

The decline in export orders contributed to a third consecutive month of overall new order decline, with the rate of order book decline accelerating to the fastest since December 2022.

This weakening demand environment prompted firms to reduce their input purchases and their payroll numbers at a faster pace globally. Worldwide input buying and employment dropped at the sharpest rates since last December.

These indicators suggest that factories are scaling back their production needs, hinting at a potential intensification of the manufacturing downturn in the coming months unless there is an improvement in the demand environment.

Attribution: S&P Global report

Subediting: Y.Yasser