The slowdown reflects weaker expansions in the United States and China, an ongoing downturn in the euro area and a fall back into contraction in Japan.

Declining new order intakes were also a major factor underlying the weaker expansion, as new business fell for the first time since January, S&P Global Market Intelligence, which conducted the survey in association with the Institute of Supply Management and the International Federation of Purchasing and Supply Management, said in a release.

The PMI posted 49.7 in July, down from 50.8 in June and below the neutral 50 mark separating expansion from contraction for the first time in 2024.

Two out of the five PMI components (new orders and stocks of purchases) were consistent with a deterioration in operating conditions, employment signalled no change and the trend in output had a much less positive effect than in recent months.

Although vendor lead times lengthened this was mainly due to supply-chain disruptions as opposed to improving demand for raw materials.

Of the 32 nations for which July PMI data were available, only 15 registered an increase in manufacturing production.

India saw the fastest rate of expansion, while growth was also recorded in China, the United States, the United Kingdom and Brazil.

Although the euro area remained the main source of weakness—with output falling across the currency bloc for the sixteenth month in a row—sharp growth slowdowns in China and the United States alongside renewed contraction in Japan also contributed to the slowdown at the global level.

Manufacturing employment was unchanged over the month in July, as increases in several nations, including the United States and Japan, offset job losses in the euro area and China.

Companies remained reluctant to hire additional staff while cost and cash flow considerations were at the forefront of their decision-making, the release said.

This also contributed to cutbacks in purchasing activity and inventory holdings.

Suppliers' delivery times meanwhile lengthened for the second month in a row, mainly due to ongoing shipping disruptions.

Average input costs and selling prices both continued to rise during July, although rates of increase eased in both cases. Inflation of purchasing costs and output charges was, on an average, still stronger in developed nations compared to emerging markets.

Fibre2Fashion News Desk (DS)