Global Manufacturing Index Contracts for First Time Since 2020

Global manufacturing contracted in September for the first time in more than two years as orders and production continued to weaken, underscoring growing risks of a worldwide recession.

The JPMorgan global manufacturing purchasing managers gauge fell for a fourth consecutive month, to 49.8 last month, according to data released Monday. Readings below 50 signal contraction and the latest figure is the lowest since June 2020.

An index of new orders shrank for a third-straight month to a more than two-year low and a measure of international trade fell, illustrating softer demand as central bankers around the world ratchet up interest rates to fight inflation. Production also shrank by the most in five months, the data showed.

Around 90 central banks have raised interest rates this year, and half of them have hiked by at least 75 basis points in one shot. Energy costs that have soared over the past year, due to Russia’s war in Ukraine as well as limited global production capacity, have hit manufacturers especially hard.