Factories around the world shut down as manufacturing demand fell and workers stayed home due to COVID-19 restrictions. Now, indices measuring manufacturing output are showing signs of a continued recovery and rebound for some of the top industrial countries in the world.
In a range of indices measured by IHS Markit, Caixin and Jibun Bank in Japan, Italy, China, Germany and the U.S. all showed positive gains to manufacturing following a rough start to 2020. China, the first country to gain traction in limit the spread of COVID-19 in their country, crossed back over the expansion threshold with an IHS index score above 50 for May, but missed the important mark again in June. Countries that felt the brunt of COVID-19 later than China, like Italy, Germany and the U.S., are breaking above the contraction zone and remaining in expansion territory.
Japan, on the other hand, continues to show signs of a longterm recession, with manufacturing continuing fall within contraction territory. In June, the Jibun Bank PMI reached 37.8 index points - an 11-year low. October numbers, while much better, are still below 50.
The U.S. was also coming off an 11-year low in factory activity in April, and while the uptick in manufacturing points to a possible recovery, many economists expect a long road ahead before the damage from COVID-19 lockdowns is reversed. While October numbers show an optimistic trend for the future, astronomical cases of COVID-19 in the country could prove to eradicate manufacturing jobs again as temperatures fall and the virus spreads faster.