LONDON (Reuters) - Global manufacturing activity contracted in June at the fastest pace in three years, dragged down by the euro zone but also by weakness at U.S. and Chinese factories, a business survey showed on Monday.
The JPMorgan Global Manufacturing PMI fell to 48.9 in June from 50.6 in May, dropping below the 50 mark that divides growth from contraction for the first time November, and its lowest reading since June 2009.
“Inventory adjustments appear to be driving the contraction in manufacturing, with the PMI showing that the rate of stockbuilding (finished goods) remains quite elevated amid sluggish gains in final expenditures,” said David Hensley, director of global economics coordination at JPMorgan.
While manufacturing activity fell across the globe, so too did demand for raw materials, leading to a decline in input prices for the first time in seven months, JPMorgan said.
The indicator, produced by JPMorgan with research and supply management organizations, combines survey data from around 20 countries including the United States, Japan, Germany, France, Britain, China and Russia.
Reporting by Andy Bruce; Editing by Ruth Pitchford