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| Global manufacturing slowdown sends stock markets tumbling | Global manufacturing slowdown sends stock markets tumbling |
| (about 1 hour later) | |
| Strong signals that a slowdown in global manufacturing intensified in September have sent stock markets tumbling. | |
| The FTSE 100 rolled back all the gains made since mid-August as it dropped 125 points to 7,234, a fall of 1.7%. Extending the losses overnight on Asian markets, shares on continental European markets also suffered losses with the Paris CAC reversing by 1.2% to 5,528. On Tuesday, the New York Dow Jones index dropped 343 points or 1.3% to 26,573. | |
| The trigger came from the latest batch of surveys to show manufacturers responding to a sharp decline in orders by cutting back production and jobs. US manufacturers posted the biggest contraction in September since the end of the 2009 recession, reflecting a slowdown in the US and global economies made worse by the tit-for-tat trade war with China. | The trigger came from the latest batch of surveys to show manufacturers responding to a sharp decline in orders by cutting back production and jobs. US manufacturers posted the biggest contraction in September since the end of the 2009 recession, reflecting a slowdown in the US and global economies made worse by the tit-for-tat trade war with China. |
| Marking the lowest level of activity since June 2009, the Institute for Supply Management (ISM) said its manufacturing index fell to 47.8% last month from 49.1%. Of the 18 sub-categories used by the ISM, only three reported growth in September. | |
| The news followed surveys across Europe showing manufacturers reducing the number of shifts and and reducing workers’ hours. UK factory output output fell in September for the fifth month in a row to register the longest downturn since 2009, despite a boost from firms stockpiling goods and materials to cope with a no-deal Brexit and the likelihood of border delays. | The news followed surveys across Europe showing manufacturers reducing the number of shifts and and reducing workers’ hours. UK factory output output fell in September for the fifth month in a row to register the longest downturn since 2009, despite a boost from firms stockpiling goods and materials to cope with a no-deal Brexit and the likelihood of border delays. |
| The IHS Markit/Cips manufacturing purchasing managers’ index (PMI) increased slightly to 48.3 from a six-and-a-half-year low of 47.4 in August to remain below the 50.0 mark that separates growth from contraction. | The IHS Markit/Cips manufacturing purchasing managers’ index (PMI) increased slightly to 48.3 from a six-and-a-half-year low of 47.4 in August to remain below the 50.0 mark that separates growth from contraction. |
| A survey of UK construction on Wednesday only added to the gloom as builders in the commercial sector joined civil engineers and house builders in cutting back on new work. | A survey of UK construction on Wednesday only added to the gloom as builders in the commercial sector joined civil engineers and house builders in cutting back on new work. |
| IHS Markit said construction companies were mothballing projects while they waited for the outcome of Brexit negotiations, pushing the construction industry index down to 43.3 in September from 45 in August. Currency traders reacted by sending the pound down to $1.22, 0.6% lower and back towards the $1.20 mark last seen in August. | IHS Markit said construction companies were mothballing projects while they waited for the outcome of Brexit negotiations, pushing the construction industry index down to 43.3 in September from 45 in August. Currency traders reacted by sending the pound down to $1.22, 0.6% lower and back towards the $1.20 mark last seen in August. |
| The World Trade Organization said the manufacturing slowdown was more closely aligned with the continuing spat between the US and China over import tariffs that had dragged on for more than 18 months. | The World Trade Organization said the manufacturing slowdown was more closely aligned with the continuing spat between the US and China over import tariffs that had dragged on for more than 18 months. |
| It warned that the outbreak of tariff wars pose a threat to jobs and living standards as it slashed its forecast for trade growth during 2019. | It warned that the outbreak of tariff wars pose a threat to jobs and living standards as it slashed its forecast for trade growth during 2019. |
| The Geneva-based WTO said it had more than halved its growth forecast for trade in goods this year from 2.6% to 1.2% after a summer of escalating US-China protectionism, a slowdown in global growth and fears of the impact of a no-deal Brexit. | The Geneva-based WTO said it had more than halved its growth forecast for trade in goods this year from 2.6% to 1.2% after a summer of escalating US-China protectionism, a slowdown in global growth and fears of the impact of a no-deal Brexit. |
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