Manufacturing sector worldwide is performing well for now

Global manufacturing PMI highest since November 2018
Brazil, UK and Germany are the leaders
China’s best performance in 2020 was in August
Signs of stabilization in Global trade

The manufacturing industry is recovering worldwide with factories running in full capacity, receiving new orders and hiring more manpower. JPMorgan Global Manufacturing PMI (Purchasing Managers Index) for August 2020 shows the highest manufacturing activity in more than two years. Global PMI for August 2020 stands at 51.8, anything above 50 means growth.

The current global manufacturing boost is being led by Brazil, UK, Germany, Italy and China. These countries have been the best performers in recent couple of months. However, Asian countries with the exception of China and Japan are not doing well with three of the worst performing countries in export being Thailand, Indonesia and Vietnam.

JPMorgan Global Manufacturing PMI is considered to be a robust index which has been publishing monthly indexes since 2007. The PMI is a weighted average of the following five indices: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and Stocks of Purchases (10%). The index covers 44 countries and currently Bangladesh is not under the index’s coverage.

However, our study shows that Bangladesh’s manufacturing sector has shown a similar kind of recovery in the last four months. In July, the value of export was the highest in more than two years.

While some see this rapid recovery as a sign of recovery others are skeptical. Experts say this boom in the manufacturing sector can be led by the urgence of the restocking in the companies. When this restocking process ends, this boom may slow down. This slowdown, if it happens, can last longer.

Despite the warning of another fallout, the manufacturers are upbeat to see the market recovering. Some say they are operating in full capacity and ready to hire more people.


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