The worldwide Purchasing Managers' Index (PMI) surveys compiled by S&P Global Market Intelligence indicated that global trade in goods and services remained in deterioration at the start of the final quarter of the year.

The seasonally adjusted Global PMI New Export Orders Index, sponsored by JPMorgan and compiled by S&P Global, posted 48.9 in October, up from 48.4 in September.

Posting below the 50.0 neutral mark for a fifth consecutive month, the latest reading signalled that trade conditions deteriorated again albeit at a less pronounced pace compared to September.

The downturn in trade activity was confined to the goods producing sector, though convergence in performance by sector was observed in the latest survey period as services trade growth slowed.

Manufacturing new export orders remained in contraction globally for a fifth successive month in October. The rate of decline eased from the 11-month high in September, but reflected the persistent weakness in the manufacturing sector, with the J.P. Morgan and compiled by S&P Global Market Intelligence, posting below the 50.0 no change level for a fourth straight month. Overall goods new orders have now declined for four successive months, albeit dropping in October to a smaller extent compared with September.

The downturn in global goods trade was partially driven by a sustained inventory reduction among manufacturers. According to data compiled from panel comments, instances of global manufacturers seeking safety stock building dipped further below the long-term average at the start of the fourth quarter, suggesting that since the early post-pandemic period, goods producers have scarcely felt the need to reaccumulate safety stocks.

The latest fall in manufacturing export orders continued to correspond to global trade volumes falling approximately 3-4% in year-on-year terms into the start of the fourth quarter of 2024.