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World - Job creation increase at historic high

04 May 2011

April saw growth of the global manufacturing sector cool further from the booming rates of expansion seen at the start of the year.

At 55.0 in April, the Global Manufacturing Purchasing Managers Index (PMI), published by JPMorgan and research firm Markit fell for the second successive month to its lowest level since last November. The headline PMI remained above the neutral 50.0 mark, signalling expansion, for the twenty-second successive month and was slightly above its average for that period.

Rates of expansion eased to seven-month lows for both manufacturing production and new orders in April.

Amongst the largest industrial regions covered by the survey, manufacturing production rose in the US, the Eurozone, China, the UK and India. Slower growth was seen in the US, the UK and China, but rates of expansion picked up in the Eurozone and India. Output continued to fall in Japan, with the pace of contraction the steepest in over two years.

Growth of incoming new business, meanwhile, slowed in the US, the Eurozone, the UK and India. China saw faster inflows of new work, whereas Japan reported a further steep contraction.

Job creation was recorded for the seventeenth month running in April. The rate of increase remained historically high and close to February's survey peak. Rates of jobs growth during the past five months have been above any seen previously in the series history. The US, Germany and the Czech Republic continued to record the steepest rates of increase. In contrast, Greece, Japan, Spain, Australia and South Africa reported job losses.

International trade volumes increased for the twenty-second successive month in April. The rate of growth accelerated slightly and remained solid, but was below the average for this period.

Developed market economies tended to record faster growth of new export orders than emerging nations. The rate of increase was especially marked in the US, where growth was close to February's 22-year peak.

Average input costs continued to rise sharply in April, amid reports of high oil prices and increases in the cost of a wide range of commodities. Input price inflation was especially marked in the US, with the rate of increase hitting a near three-year peak.

Elsewhere, cost inflation generally eased. Rates of increase in the Eurozone and emerging markets were the slowest since December 2010 and last September respectively, but still well above their long-run averages.

Inventories of purchases edged higher in April, following two successive months of decline. Among the largest nations covered by the survey, stocks rose in the US, Germany, France and India.

David Hensley, Director of Global Economics Coordination at JPMorgan, said "the April PMI data signal that global manufacturing has moved onto a lower growth plane, with rates of expansion in output and new orders cooling further from the sky-high levels seen around the turn of the year. Growth is still above its long-run average, however, and has held up well considering some of the shocks hitting the global economy so far in 2011. Job creation is also ongoing and international trade volumes still rising."

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