October Global PMI Barely Inches Up, Weighed Down by Europe

Global manufacturing continued to stagnate in October, with the shaky eurozone threatening to drag other economies into recession.

According to a business survey by JPMorgan, the Global Manufacturing Purchasing Managers Index rose slightly to 50.0 in October from 49.8 in September, putting it right on the threshold that separates growth from contraction. In manufacturing activity, a reading above 50 indicates expansion, below 50 shows a contraction.

Levels of production and new orders fell slightly over the month to 48.4 in October from 48.8 in September, the worst since May 2009, suggesting the continued economic uncertainty in the eurozone has seriously affected world trade activity.

"The global manufacturing PMI edged up to the break-even 50 mark in October. The new orders index was responsible for the increase, although it remains very depressed, whereas the coincident activity indexes of output and employment were little changed. Although U.S. inventory conditions appear good, national surveys registered a potential excess in the growth of finished goods inventory in Asia," David Hensley, director of global economics coordination at JPMorgan, said in a statement.

On Wednesday, a Markit survey showed the euro zone manufacturing PMI dropped to 47.1 in October from an already-weak level of 48.5 in September. Data of individual countries showed manufacturing activity dropped to 27-month lows in Germany, Austria and Netherlands, a 28-month low in Italy and a 31-month nadir in Greece.

German manufacturing contracted to 49.1 for the first time since September 2009, while France was already in the red for the third month in a row now.

If for any consolation, JP Morgan noted the strengthening growth in China, Russia and India that appear at least to be stable. China posted 51 in October, up from 49.9 in September; Russia posted slight growth at 50.4 from 50 and India recorded 52 from 50.4 a month ago. The U.S. also posted a slight gain.

"Signs of weakness are becoming increasingly apparent in core nations, while the periphery remains mired in recession," Markit wrote in an accompanying statement.

The PMI is based on a survey of thousands of manufacturing firms.