Overall, the global manufacturing economy continued to expand modestly, with no country among the top-15 trading partners contracting in June—a significant achievement. The J.P. Morgan Global Manufacturing PMI remained unchanged at 52.6 in June, with exports and hiring moving higher but new orders and output slowing a little. More importantly, manufacturing leaders remain very upbeat regarding activity moving forward, with the index for future output increasing from 63.6 to 63.8. Among the largest developments in the latest survey data, China and South Korea both returned to positive territory in June. It was the first expansion in South Korea since July 2016, and the Chinese manufacturing sector has now grown in 10 of the past 12 months.
Europe continued to dominate the list of the top export markets with strong manufacturing growth, with the IHS Markit Eurozone Manufacturing PMI once again reaching its highest level since April 2011. Helping to buoy the headline number, Austria, Germany and the Netherlands each rose at their quickest paces in more than six years, with improvements also seen in France, Ireland and Italy. Greece was another bright spot, expanding ever so slightly for the first time since August, even with lingering challenges. For its part, industrial production in the Eurozone jumped 1.3 percent in May, the fastest monthly rate since November and led by strength in energy and consumer goods. On a year-over-year basis, industrial production has risen 4.0 percent, a pace not seen since August 2011. Retail sales picked up in May, up 0.4 percent, or 2.6 percent year-over-year. Finally, the unemployment rate in May remained stable at 9.3 percent, its lowest level since March 2009.
Closer to home, Canadian manufacturing activity grew modestly in June despite pulling back from a six-year high in April, and Mexican sentiment rebounded to a 13-month high. Digging further into the data, manufacturing sales in Canada jumped 1.1 percent in April, extending the 0.8 percent gain in March and led by strength in the petroleum and coal products and primary metals sectors. Most impressively, sales in the sector have jumped 7.6 percent year-over-year. Similarly, retail spending growth also saw healthy gains, up 0.8 percent in April (or 1.5 percent excluding motor vehicles and parts sales), with year-over-year growth of 7.0 percent. In addition, the unemployment rate declined to 6.5 percent in June, its lowest level since October 2008. Meanwhile, in Mexico, industrial production rebounded, up 1.0 percent in May after falling 4.2 percent in April. Output in the manufacturing sector rose 5.0 percent in May.
The NAM continued to work for a fully functioning U.S. Export-Import (Ex-Im) Bank while publicly calling for the withdrawal of the nomination of Scott Garrett to lead the Ex-Im Bank. The NAM also provided detailed input and testified at U.S. government hearings organized to gather information on priorities for the North American Free Trade Agreement (NAFTA) renegotiations. President Donald Trump hosted India’s and South Korea’s leaders in late June and then attended the G20 and participated in several bilateral meetings with a heavy trade focus. The administration is seeking input on the operation of trade and investment agreements and U.S. preference programs.
The Commerce Department issued a report on the Miscellaneous Tariff Bill (MTB) and is separately continuing its national security investigation into imports of steel and aluminum. The administration made some modifications to limit travel to and trade with Cuba. The State Department issued its annual investment climate statements, while annual reporting shows an overall drop in foreign direct investment (FDI).