On July 6th, China Federation of Logistics & Purchasing released data showing that the global Manufacturing Purchasing Managers' Index (PMI) for June 2023 was 47.8%, marking a decrease of 0.5 percentage points compared to the previous month. This is the fourth consecutive monthly decline and the ninth consecutive month below the 50% threshold, hitting a new low since June 2020.

In terms of regional breakdown, the Asia Manufacturing PMI remained unchanged from the previous month and still stayed above 50%. The Africa Manufacturing PMI experienced a slight decline but remained near the 50% critical point. However, both the Europe Manufacturing PMI and the Americas Manufacturing PMI continued to decline from the previous month and remained below the 50% level.

China Federation of Internet of Things pointed out that the index has continuously remained below 50%, hitting a new low in this stage again, indicating that the downward trend in the global manufacturing industry has intensified, and the road to recovery still faces significant challenges. High inflation, ongoing geopolitical conflicts, financial market turbulence, and increasing trade barriers continue to affect the growth momentum of the global economy.

According to the latest survey report by the World Economic Forum, economists' expectations for the global economic outlook in 2023 are mixed. 45% of chief economists believe that a recession is possible, while another 45% think it is unlikely, indicating that the current global economy is facing significant uncertainty.

Looking at the trends in various regions, the manufacturing industries in major European and American countries continue to decline and are still probing new lows, serving as the main drag on the further decline of the global manufacturing industry. The Asian manufacturing industry continues to maintain steady growth, and the manufacturing industries of major African countries also remain relatively stable, providing a certain stable foundation for the global manufacturing industry.

China Federation of Internet of Things stated that despite the continued downward pressure on the global economy, there are still some positive factors that provide support for the subsequent recovery of the global economy.

Firstly, regional economic and trade cooperation has become closer, and the effects of the Regional Comprehensive Economic Partnership (RCEP) are expected to continue to show. With the comprehensive implementation of RCEP among the 15 signatory countries for some time, as policies and measures gradually take effect, trade barriers within the region will be effectively reduced, and trade processes will be further simplified, providing a foundation for the steady growth of global trade.

Secondly, the expansion of BRICS countries is underway, providing new support for the stability of the global financial system. In a recent meeting of the "BRICS Five" foreign ministers, there was a basic consensus on the issue of Saudi Arabia, Egypt, and other countries applying to join the BRICS countries, as well as expanding the BRICS grouping. Multiple countries are seeking to join the BRICS bank, which will facilitate better economic and financial cooperation, promoting a more balanced and inclusive new financial order.

The downward pressure on European manufacturing increases, and the PMI continues to decline.

In June 2023, the Purchasing Managers' Index (PMI) for European manufacturing was 45.4%, a decrease of 0.8 percentage points compared to the previous month. This marks the fifth consecutive monthly decline and the eleventh consecutive month below 50%, hitting a new low since June 2020. Among the major countries, Russian manufacturing still maintains steady growth, although the pace has slowed down, with the PMI declining by 0.9 percentage points to 52.6% compared to the previous month, still within the expansion range above 50%. However, manufacturing in Germany, the United Kingdom, France, and Spain all continued to decline, with their PMIs below 50%. Germany's manufacturing experienced a relatively significant downward adjustment, with the PMI dropping by 2.6 percentage points to 40.6%, marking a continuous phase of new lows.

The current downward pressure on manufacturing in the Eurozone has intensified, and the economy has entered a technical recession. Data recently released by Eurostat shows that the Eurozone's GDP declined by 0.1% in the first quarter of this year, lower than the initial slight growth estimate. At the same time, the final value of GDP for the fourth quarter of 2022 was also revised to a 0.1% decline, originally reported as unchanged, indicating that the Eurozone's GDP has experienced negative growth for two consecutive quarters, leading to a technical recession. Meanwhile, despite the fragile economic situation, the European Central Bank (ECB) currently maintains a tight monetary policy stance. In the monetary policy meeting held on June 15th, the ECB decided to raise all three key interest rates in the Eurozone by 25 basis points. Additionally, during the recent ECB forum, policymakers made hawkish comments, leading experts to predict that the ECB will raise interest rates again in July and September. The risk of stagflation in Europe is further exacerbating, putting the economy under continued pressure in the short term.

Manufacturing in the Americas continues to decline, and the PMI hits a new low in this stage.

In June 2023, the Purchasing Managers' Index (PMI) for manufacturing in the Americas was 46.5%, a decrease of 0.8 percentage points compared to the previous month. This marks the eighth consecutive month running below 50%, hitting a new low in this stage since June 2020. The data indicates that manufacturing in the Americas continues to experience a downward trend, and the pace of decline has accelerated.

Among the major countries in the region, except for Mexico, where manufacturing PMI remained above 50%, the United States, Brazil, Canada, and Colombia all reported manufacturing PMIs below 50%.

Looking specifically at the United States, the ISM report shows that the manufacturing PMI dropped by 0.9 percentage points to 46% compared to the previous month, remaining below 50% for the eighth consecutive month. The demand for new manufacturing orders in the U.S. has slowed down, with the new orders index rising by 3 percentage points to 45.6% compared to the previous month. However, production activities have slowed down, with the production index declining by 4.4 percentage points to 46.7% compared to the previous month. Both inventory and employment indicators have declined, with the raw materials inventory index and the employment index dropping by 1.8 and 3.3 percentage points, respectively, to 44% and 48.1%. Both indicators have fallen below the 50% level, reflecting the cautious outlook of manufacturing companies for the future. Meanwhile, despite a recent slowdown in U.S. inflation, with the May Consumer Price Index (CPI) increasing by 4% year on year, marking the smallest year-on-year increase since March 2021, it has not yet reached the target level. Supported by recent strong employment data, the Federal Reserve will continue to maintain a tight monetary policy. The "dot plot" forecast from the June monetary policy meeting shows that there may be two more rate hikes this year. Overall, the U.S. economy still faces significant challenges. In a recent report, the IMF emphasized the risks in the U.S. economy. The IMF believes that the longer the high-interest rates persist, the greater the likelihood of financial chain disruptions, including in the U.S. government bond market, and the more difficult the recovery may be.

Manufacturing in Africa remains stable with a slight slowdown, and the PMI is still around 50%.

In June 2023, the Purchasing Managers' Index (PMI) for manufacturing in Africa was 49.8%, a decrease of 0.4 percentage points compared to the previous month. However, it still remains around the critical point of 50%, indicating that the trend in African manufacturing remains relatively stable. Among the major countries in the region, Nigeria's manufacturing industry continues to maintain a steady growth trend, with the manufacturing PMI above 53% despite a slight decrease from the previous month. Egypt's manufacturing industry shows a slowing decline with the PMI still below 50%, but it has increased compared to the previous month. On the other hand, South Africa's manufacturing industry is experiencing an accelerated decline, with the PMI falling below 48%.

Despite some signs of slowing down in the context of global economic downward pressure, the PMI for manufacturing in Africa is still hovering around the 50% threshold, indicating that the current African economy maintains a relatively stable trend and possesses certain development potential. Especially with the deepening of the Belt and Road cooperation, Sino-African economic and trade cooperation continues to optimize and upgrade, moving towards high-quality development. Recently released data from the China-Africa Economic and Trade Expo shows that many aspects of China-Africa economic and trade cooperation have reached new highs. The General Administration of Customs recently released the China-Africa Trade Index, with a base value of 100 points in 2000 and reaching 990.55 points in 2022, indicating a rapid and positive trend in China-Africa trade. The continuous growth of bilateral trade between China and Africa has not only driven African development but also created more favorable conditions for international cooperation with Africa, continuously promoting steady economic growth in Africa.

Manufacturing in Asia maintains a steady growth momentum, and the PMI remains unchanged from the previous month.

In June 2023, the Purchasing Managers' Index (PMI) for manufacturing in Asia was 50.4%, unchanged from the previous month, marking the sixth consecutive month above 50%. This indicates that manufacturing in Asia continues to maintain a steady growth momentum. Looking at major countries, China's manufacturing PMI remains below 50%, but the economic operation is stabilizing. The decline in market demand has slowed down, while the growth momentum of new driving forces has accelerated. Enterprise production is stable with some growth, and efforts to destock raw materials and finished products continue, leading to a stabilization of market prices. India's manufacturing industry continues to maintain a relatively high growth rate, although it has slowed down compared to the previous month, with the PMI still above 57%. On the other hand, Japan's manufacturing industry has contracted again, with the PMI falling below 50%, while Vietnam and South Korea's manufacturing industries continue to show a downward trend, with PMI below 48%.

The current PMI for manufacturing in Asia remaining above 50% indicates that despite the downward pressure on the global economy, the Asian economy still exhibits good resilience and steady growth. Currently, China remains an important engine of economic growth in the Asian region. In a recent report on "Global Economic Outlook," the credit rating agency Fitch Ratings emphasized that China will become the fastest-growing major economy in the world, with an expected annual economic growth rate of 5.6%, a 0.4 percentage point increase from the forecast in March. Officials from the International Monetary Fund (IMF) also previously stated that China's economy is expected to grow by 5.2% in 2023, continuing to be a growth engine for the Asia-Pacific region and a significant driving force for the future global economic recovery.

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