Key facts
- Japan's manufacturing sector expanded in June, achieving its strongest quarterly performance since early 2014.
- The S&P Global Japan Manufacturing PMI rose to 54.8 in June, driven by new orders and production output.
- India's HSBC India Manufacturing PMI fell to 54.2 in June, with new orders and export orders growing at their slowest rates in months.
- U.S. manufacturing activity slowed in June as the ISM manufacturing PMI fell to 53.3.
- Prices paid for inputs by U.S. factories remained elevated at 73.0 in June.
- U.S. factory employment has contracted in 40 of the last 41 months.
Japan's manufacturing sector expanded in June, marking its strongest quarterly performance since early 2014, with the S&P Global Japan Manufacturing PMI rising to 54.8. This growth was fueled by new orders, which saw their fastest pace in over two years, supported by domestic demand and inventory building in anticipation of shortages and price hikes related to Middle East conflicts. Production output also increased significantly, and employment grew at its fastest rate since April 2018, with manufacturers optimistic about AI and semiconductor demand.
Conversely, India's manufacturing sector experienced a slowdown in June, with the HSBC India Manufacturing PMI falling to 54.2. New orders and output growth slowed to their second-weakest rates since mid-2022, and export orders declined at their slowest pace in 39 months due to subdued demand from European clients. While cost pressures eased, hiring growth weakened, and business confidence dropped to a five-month low.
In the U.S., manufacturing activity eased in June, with the ISM manufacturing PMI falling to 53.3 from 54.0 in May. This slowdown follows a surge in the prior month, potentially due to businesses front-loading orders. Despite the pullback, manufacturing has grown for six consecutive months, supported by AI investment. New orders and exports contracted, while factory inventories rebounded and supply chains showed some improvement. Prices paid for inputs remained elevated at 73.0, and factory employment has been consistently depressed.