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Global manufacturing did not fare quite as well as the US in June. From Europe to Japan to numerous emerging market economies, manufacturing activity steadily slowed according to several reports released this week.
Obvious blame for the recent slow patch in manufacturing lies with supply disruptions from the earthquake in Japan. However, those disruptions alone do not fully explain the dip into contractionary territory for some of the larger emerging economies, such as Brazil and Taiwan. China, as another example, registered its lowest Purchasing Managers Index (PMI) reading in 28 months.
It would be easy to say global activity is slowing, which is partially true, but there is also a seasonal aspect to consider. Manufacturing tends to slow between May and August, before accelerating in the fall. That effect is readily apparent in the globally aggregated PMI, which showed a similar pattern of slowing last year.
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