Global manufacturing stabilises in November - Industry roundup: 4 December
by Ben Poole
Global manufacturing stabilises in November
November saw the global manufacturing sector stabilise following four months of contraction. At 50.0, up from 49.4 in October, the J.P.Morgan Global Manufacturing Purchasing Managers’ Index (PMI) – a composite index produced by J.P.Morgan and S&P Global Market Intelligence in association with ISM and IFPSM – signalled no change in operating conditions, albeit with marked regional differences apparent.
Improved business conditions in mainland China (with a five-month high PMI reading of 51.5) and the rest of Asia (where the PMI rose to 51.1 on average) contrasted with a deepening downturn in the eurozone (whose PMI sank to 45.2). Conditions came close to stabilising in the United States (PMI at a five-month high of 49.7).
Three of the five PMI sub-indices were at levels consistent with expansion in November, as output and new orders registered mild growth and average vendor lead times lengthened. In contrast, employment and stocks of purchases both decreased.
Manufacturing production rose for the second successive month in November. Although the rate of expansion was only slight, it was nonetheless the best since June. Data broken down by sector signalled that output growth at consumer and intermediate goods producers more than offset a further downturn in the investment goods category. Increased production was linked to stabilising new order intakes and the clearance of backlogs of work.
November saw the level of incoming new business rise for the first time in five months, albeit only marginally. The trend in international trade flows remained weak, however, as intakes of new export work contracted for the sixth consecutive month.
Export gains were limited to eight countries in November. India saw the strongest growth, followed closely by Spain, which bucked the broader trade malaise reported out of the eurozone. Strong export gains were also seen in Taiwan and South Korea, as well as Russia. Mainland China saw improved export performance, in contrast to the US and Japan, which both saw overseas demand decline again. The bottom of the export rankings was dominated by European economies, with France reporting the sharpest decline.
Manufacturing employment declined for the fourth successive month in November. Staffing levels were reduced in the euro area (on average), China, Japan and the UK, whereas the US, India and Brazil were among the nations to register jobs growth. Input buying volumes across the global manufacturing sector increased for the first time since June, but stocks of both finished goods and raw materials declined. Business optimism improved to a six-month high, with confidence levels rising across the consumer, intermediate and investment goods industries.
Price pressures strengthened during November. This was signalled by mild pick-ups in the rates of inflation of both input costs and selling prices. Increased costs partly reflected supply-chain stresses, as average vendor performance deteriorated for the sixth month in a row.
Firms turning to AI and data scientists to enhance regulatory compliance
Faced with greater regulatory oversight, firms are focusing not only on adhering to regulations but also leveraging advances in technology to gain a strategic edge, according to Nasdaq’s ninth Annual Global Compliance Survey. Of the respondents, 35% expect technologies like AI to be the biggest driver of compliance process change over the next year, compared to 9% last year and 0% the year prior. This shift marks a move away from simple workflow tools towards more data-driven investigative approaches.
Improving data quality, integrating data sources and the cloud, and developing cross-product surveillance and related tools were all identified as areas where firms are likely to invest over the next 12 to 24 months. One major challenge this could help address is in the case of false positives, where advanced data processing and AI can be used to improve the quality of alerts flagged up by automated systems. Many compliance teams have devoted significant effort to minimising them, with almost 90% acknowledging that reducing the number continues to be extremely or somewhat challenging. These false positives can be highly disruptive, leading to unnecessary investigations, wasted resources and potential delays in identifying genuine threats.
Looking ahead to the next 12 to 24 months, firms are redirecting their investment in talent towards data scientists (12%) and additional support staff (13%). This shift indicates a growing recognition among organisations of the critical role that advanced technology and sophisticated data analysis play in strengthening modern compliance systems and controls. In addition, the increased demand to hire junior resources reflects a need to analyse ever increasing amounts of data, and that rapid deployment of AI and other algorithmic processes are not being delivered as part of a cohesive data, analytics and analysis strategy.
This aligns with broader trends in the finance industry where front office teams and risk functions are increasingly investing in their underlying data infrastructure and advanced technology capabilities, including the use of sophisticated tools and systems for real-time monitoring and predictive analytics.
Global securities lending revenue nearly flat in November
The global securities finance industry generated $779m in revenue for lenders in November, according to DataLend, the market data service of fintech EquiLend. The figure represents a slight 0.3% decrease from the $781m generated in November 2023.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totalled an additional $208m in revenue in October, down 3% year-over-year.
Equity revenue declined globally by 6% due to a 14% drop in fees year-over-year. With US equity indexes soaring to record highs following the presidential election, lending revenue for US stocks fell a substantial 12%, with average fees declining 25% versus November 2023.
Equity revenue in EMEA and APAC saw moderate gains of 6% and 2%, respectively, year-over-year. The Taiwan and Hong Kong markets were bright spots, with the former capturing 30% in annual gains and the latter climbing 26%.
Sovereign debt continued its strong performance from October, with global government debt lending revenue increasing 23% on the back of a 20% increase in balances and a 3% increase in fees. US government debt remained the biggest factor in the market, with over $875bn in on-loan securities generating 36% more revenue year-over-year.
Corporate debt lending saw more modest annual gains, with revenue increasing 5% globally. Fees for corporate bonds fell 15% year-over-year, but revenue increased due to a 23% jump in balances.
Deutsche Bank launches merchant solutions in Asia Pacific
Deutsche Bank has officially launched Merchant Solutions capabilities in Australia, India, Indonesia and South Korea. The solutions provide the bank’s clients with a global payment acceptance platform and access to a diverse range of local payment methods in these four markets.
The launch follows Deutsche Bank’s strategic investment in the Australian PayTech company, DataMesh Group, announced in February 2023. Through this collaboration, Deutsche Bank leverages DataMesh’s payment orchestration layer, allowing it to work with individual payment acquirers, and enable merchants in Australia, India, Indonesia and South Korea to accept online payments within individually regulated currency zones.
DataMesh consolidates cross-border payment data and enables Deutsche Bank’s clients to manage their payments across currency borders and different jurisdictions centrally.
The bank says it will continue to roll out Merchant Solutions capabilities across Asia over the next few years, prioritising Thailand, Vietnam, Philippines, Singapore, Malaysia and Hong Kong. It will focus on offering key local payment methods and helping clients simplify connectivity to global payment acceptance platforms.
DBS joins programme to help SMEs leverage GenAI for productivity and innovation
DBS, in partnership with Enterprise Singapore (EnterpriseSG) and the Infocomm Media Development Authority (IMDA), has announced a strategic public-private partnership which aims to drive wider generative artificial intelligence (GenAI) awareness and adoption of GenAI solutions among Singapore’s small and medium-sized enterprises (SMEs).
GenAI can help businesses unlock cost savings, boost productivity and drive innovation, positioning themselves competitively in a rapidly growing digital economy. However, only about 4.2% of SMEs in Singapore have adopted some form of AI technology today. To address this gap, Spark GenAI was developed to help SMEs understand how GenAI solutions can help solve business challenges.
DBS aims to reach out to 50,000 local SMEs over the next two years, equipping them with actionable insights and hands-on guidance to integrate GenAI into their operations and drive tangible outcomes.
Spark GenAI offers SMEs a structured, simplified approach to discover potential use cases and practical applications of GenAI solutions in their business operations in areas such as customer engagement and marketing.
MUFG taps Surecomp for digital trade finance capabilities
MUFG has added Surecomp’s RIVO platform as its new trade finance multibank channel, complementing its existing third-party channels in EMEA.
The RIVO digital hub’s open API provides MUFG’s corporate clients with universal access to counterparty importers, exporters, banks, insurers and shipping companies. In this way, the bank says it will facilitate clients’ faster access to trade finance requests, communicate with customers in real-time and expedite the issuance of documents like guarantees and letters of credit.
“We are committed to supporting our clients to drive operational agility and efficiency,” commented Vanessa Manning, Head of Transaction Banking, MUFG EMEA. “We want to provide them with the tools they need to successfully deliver “real economy” growth across the footprint of their operations.”
Corpay completes cross-border payments acquisition
S&P 500 corporate payments firm Corpay has completed the acquisition of GPS Capital Markets, a B2B cross-border solutions provider to upper middle market companies, primarily in the US. This follows the recent addition of Paymerang.
In total, the two corporate payment deals closed this year will contribute over $200m in revenue for Corpay and approximately $0.50 of cash EPS accretion in 2025.
Corpay also announced the completion of the divestiture of Comdata Merchant POS Solutions, a point-of-sale hardware and software solution for truck stop merchants, to a private equity-backed company PDI Technologies. The transaction is a result of last year’s strategic review to simplify the company and focus on its core business.
The company says it will provide financial guidance for 2025 when it releases fourth-quarter earnings in early February.
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