Global manufacturing activity contracted sharply in December, according to a new report, signaling a deepening worldwide economic downturn. The contraction was widespread, affecting both developed and emerging markets.

The report cited weakening demand, declining new orders, and tightening credit conditions as primary drivers of the downturn. Many companies are reducing production and inventories in response to the weakening economic outlook.

Key Findings

• Global manufacturing PMI fell to its lowest level since the survey began.
• New orders declined sharply, indicating weaker demand.
• Employment in the manufacturing sector continued to decline.
• Input prices fell, reflecting lower commodity prices.

The sharp contraction in manufacturing activity raises concerns about the global economic outlook. Many economists are now forecasting a prolonged recession.

Regional Performance

Manufacturing activity declined in all major regions of the world. The steepest declines were recorded in Europe and North America. Emerging markets, such as China and India, also experienced a slowdown in manufacturing activity.

Outlook

The outlook for the manufacturing sector remains uncertain. The global economy faces numerous challenges, including weak demand, tight credit conditions, and geopolitical risks. A sustained recovery in the manufacturing sector is unlikely until these challenges are addressed.