Tuesday , 11 June 2024
Home Global Economy When the bottleneck eased, they were loaded into stock taking
Global Economy

When the bottleneck eased, they were loaded into stock taking

Raw material bottlenecks and inflationary pressures in the global manufacturing sector continue to be a major problem for manufacturers. However, manufacturing purchasing managers index data published by IHS Markit indicates that inflationary pressures are signaling relaxation in many countries, delays in shipments are starting to improve, and companies see this as an opportunity and increase their inventory purchases at a record pace. The expectation that some problems in supply chains will continue in 2022 pushes manufacturers to be more cautious in many economies from the Eurozone to Asia. This situation is also seen in the December PMI data of IHS Markit, which sheds light on the development of the sector.

EURO REGION

The historical increase in stock purchases is at a record

Producers struggling with supply bottlenecks in the Euro Zone manufacturing sector realized the fastest stock purchases in the survey history, with the improvement in shipment times in December. According to the manufacturing PMI data released by IHS Markit, companies that want to avoid the effects of the bottlenecks brought their stock purchases to a record level in the survey history. Delays in shipments were the lowest since February, while the manufacturing sector continued to slow down in December, despite stock purchases. Manufacturing PMI fell from 58.4 to 58 in December. Although inflation continues to be close to the records of the survey history, a slight decrease is observed.

GERMANY

Shipping times are getting shorter again

In Germany, bottlenecks continue to hinder factories. But there are signs that the bottlenecks are starting to loosen. While raw material shipment times, which have been extended due to the pandemic, have started to shorten again, input costs and ex-factory prices have increased sharply in December as well, but there has been a decrease in the inflation rate. The indicator, which indicates delays in raw material shipments, fell to the lowest level since January 2021. The Manufacturing PMI, which takes into account many metrics such as new orders, production, employment and supplier bottlenecks in the manufacturing sector, remained unchanged in the range at 57.4, the lowest level since January 2021.

FRANCE

The month with the least delay since March

In France, in the second half of 2021, the growth in the manufacturing sector was interrupted, falling into a zone of complete contraction in October. Although the French manufacturing sector, which recorded a slight growth in November, continued to grow in December, the manufacturing PMI fell to 55.6 in December from 55.9 in November. The delay in shipments has also decreased to the shortest times since March in France. As in Germany, companies in France increased their stocks at a record pace.

ITALY

Strong growth in manufacturing brought job growth

In Italy, the sector maintained its very strong course and closed the year. Manufacturing PMI, which marked a historical record growth of 62.8 in November, fell to 62 in December. It is reported that an unprecedented pressure on production capacities continues, bottlenecks continue despite strong sales, but as a result, there has been a very serious increase in employment. The backlog in orders marked one of the fastest increases in survey history.

SPAIN

Weakest order growth since February

Inventories also increased at a near-record pace in Spain, where the Manufacturing PMI fell from 57.1 to 56.2. Inflationary pressures continued to increase for the Spanish manufacturing sector in December as well, with delays in shipping times continuing to lengthen, unlike other major Eurozone economies. There is a serious weakening in new order growth. The data shows the weakest order growth since February in December.

IRELAND

Delays at 1-year low

Manufacturing in Ireland posted the slowest growth since March in December, with manufacturing PMI slipping to 58.3 in December from 59.9 in November. Inflation pressures continue and shipping delays have dropped to a one-year low. The Netherlands and Nigeria are among the economies where stocks increased at a record level in the survey history.

INDIA

Input cost inflation begins to weaken

In India, producers closed the year with strong new orders. In addition, input cost inflation fell to a three-month low. On the other hand, inflation is still high enough to force producers. The increase in factory sales prices was the weakest increase since October 2020. Manufacturing PMI fell to 55.5 from 57.6 in November, where it hit a ten-month high.

MALAYSIA

Rising costs resulted in workforce reductions

The manufacturing sector in Malaysia continued to accelerate in December, with production and sales accelerating compared to November, while manufacturing PMI rose from 52.3 to 52.8. However, companies also reduced their workforce in December due to rising costs. Raw material shortages and shipment delays continue.

INDONESIA

Manufacturing output hits records, boosts inventories in December

Indonesia recorded the third-fastest manufacturing output growth in survey history. Manufacturing PMI fell to a three-month low in December, falling to 53.5 from 53.9 in November. On the other hand, shipping times continue to lengthen, resulting in higher input costs.

TAIWAN

Problems in supply extend order queue at factory

Taiwan is also trying to solve the increasing costs and delay problems in the manufacturing sector by increasing the stock. Manufacturing PMI rose from 54.9 in November to 55.5 in December, pointing to strong manufacturing growth. However, the problems experienced in some raw materials and components result in the companies being unable to fulfill some orders. This causes the order queue in the factories to get longer. In the IHS Markit report, it is stated that this situation is worsened by the companies’ inability to create employment, and some companies have stated that they have difficulties in recruiting employees, especially from abroad.

SOUTH KOREA

Decline in export orders pushes the industry

The South Korean manufacturing sector is experiencing both demand-side and supply-side problems. Manufacturing PMI rose from 50.9 in November to 51.9 in December, but the first month-on-month decline in exports in October, rising COVID-19 cases around the world and the lack of adequate containers led to a decline in new orders. The delay in shipments is the worst since April 2020.

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

Global Economy

Spotlight on 2023: S&P 500 and the Significance of the 4400 Level

In our past exploration of the financial landscape of 2023, we delved...

Global Economy

AI and Data Analytics Drive Efficiency in Money Laundering Detection

BIS Innovation Hub Turns to Tech for Money Laundering Detection The BIS...

Global Economy

Russell 2000 Gains Momentum as Tech Stocks Outperform Value

Tech stocks have dominated the equity markets in recent months, surpassing value...

Global Economy

Crypto Exchange Bybit Announces Exit from Canadian Market Amid Regulatory Changes

Regulatory Shifts Prompt Bybit's Strategic Withdrawal from Canadian Crypto Market