Global trade conditions worsen for 4th month in a row in Sep: S&P GMI

A mere three of the top ten trading economies recorded higher goods export orders at the end of Q3 2024, with only India and Russia seeing noticeable improvements as Brazil recorded only a marginal rise in goods exports.

The seasonally adjusted global PMI new export orders index, sponsored by JPMorgan and compiled by S&P Global, posted 48.4 in September, down from 48.9 in August. The reading signalled that trade conditions deteriorated for a fourth successive month and at the most pronounced pace since December 2023.

The reduction in trade activity was notably driven by deteriorations in the manufacturing sector while services export business rose at an accelerated pace, Jingyi Pan, economics associate director at S&P GMI, wrote on the company website.

Manufacturing new export orders fell at the joint-fastest pace in 13 months in September, with the rate of reduction also matched by that in October 2023. The latest fall in export orders is aligned with a wider slowdown in manufacturing sector conditions with the J.P. Morgan global manufacturing PMI, signalling the sharpest deterioration in operating conditions in nearly a year.

Overall new orders in the manufacturing sector meanwhile declined for a third straight month and at the most pronounced pace since December 2022.

Global manufacturers are seeing greater uncertainties, which affected demand. Concerns also rose surrounding economic risks, reaching the highest degree this year within the goods producing sector.

At the same time, instances of safety stocks building remained below the long-run average, thereby suggesting that global goods producers have yet to commence restocking.

The latest fall in manufacturing export orders correspond to global trade volumes falling approximately 3-4 per cent in year-on-year terms at the end of Q3 2024.

Developed markets continued to lead the downturn in exports in September, with the rate of decline accelerating to the fastest in the year-to-date. This further extended the period of developed world export contraction that commenced mid-2022.

In line with the global trend, the slowdown in export conditions is centred on the goods producing sector, where export orders fell at the sharpest pace in nearly a year.

While developed markets led the decline, emerging markets were not spared. A second straight month of falling export business was recorded in September, and one which the most pronounced in ten months.

While India retained the lead for a nineteenth straight month, the lead is slim as export orders growth slowed for a second successive month to softest since March 2023.

Fierce competition curbed further growth in demand for Indian manufactured goods in September, thereby contributing to the slowest expansion of the Indian manufacturing sector since January.

China was the only major emerging market economy to record lower goods export orders among the big four, with the rate of contraction rising to a 13-month high. Heightened competition, fall in underlying demand and subdued market conditions were key drivers for the reduction in overall goods orders there, according to the September survey.

Meanwhile, the bottom five of the list were all developed economies with the European Union (EU) in the lead as the fall in good export orders unfolded at a rate that was sharp and the most pronounced in nine months.

This was part of a wider manufacturing downturn for the eurozone, with Germany's manufacturing PMI posting the lowest reading in nearly a year. This was followed by Canada and Japan, while the United States and the United Kingdom registered only modest declines in goods export orders in the latest survey period.

Fibre2Fashion News Desk (DS)