Below is the summary of this month’s Global Manufacturing Economic Update, with the full report found here:

In the past month, there have been some signs that the overall global economy is improving, despite significant headwinds. We continue to see modest growth in North America, including the United States and our largest trading partners, Canada and Mexico. Both Brazil and China have seen gains in production activity, with Brazil edging into expansion territory (with a Purchasing Managers’ Index (PMI) of 50.2) and China just barely there (49.5). (PMI values over 50 suggest that manufacturing activity is expanding, with contractions for values under 50.) This is not to suggest that these nations’ economies are strong, as persistent weaknesses continue to dampen growth, but it does indicate a more positive picture than seen in other regions of the world, most notably in Europe.

Manufacturing activity in the Eurozone is off sharply. The Flash Eurozone Manufacturing PMI fell from 46.1 in September to 45.3 in October. Declining new orders continue to reduce production and employment across the continent. October manufacturing PMI values from Markit show contracting activity levels, even as some indices improved for the month. This includes France (43.5, up from 42.7), Germany (45.7, down from 47.4) and the United Kingdom (47.7, down from 48.4). At the same time, these data are supported by reports that Eurozone industrial production has fallen nearly 3 percent over the past year, and unemployment has risen to an all-time high of 11.6 percent. (Spain’s unemployment rate is a whopping 25.8 percent.) Nonetheless, despite these dire statistics, it is important to note that the European Central Bank’s actions—including its program to purchase sovereign debt from troubled nations—has lifted spirits somewhat, even if it has not solved the underlying structural challenges.

As noted last time, six of the top 10 export markets for U.S.-manufactured goods are currently contracting, with PMI values of less than 50. This complicates our ability to increase exports. The most recent data suggest that the U.S. trade deficit widened in August on lower goods exports and imports. Higher petroleum costs accounted for much of this, but there were also significant declines in other categories, including industrial supplies, foods and consumer goods. On the other hand, year-to-date manufactured goods exports were $43.6 billion higher in 2012 than for the same period in 2011. While this suggests a much slower pace than in 2010 or 2011 (mostly due to the slower global economic environment), it is perhaps surprising that export growth is positive at all given the number of headwinds in the marketplace right now.

Over the course of the next week, several PMI reports will come out providing even greater detail on the current global manufacturing environment. This will culminate in the release of the JPMorgan Global Composite PMI on Tuesday, which summarizes activity across 32 different countries. The last one observed falling output, new orders and employment across the world manufacturing sector, with some countries helping to lift the index from 48.1 to 48.9. I would expect this figure to reflect some gains overall but continuing to contract. The other highlight of the week will come on Thursday, with the release of new international trade data for September.

Chad Moutray is the chief economist at the National Association of Manufacturers.

New data from Markit provides mixed news for manufacturers and the economy. First, the Markit Flash Manufacturing Purchasing Managers’ Index (PMI) continues to show modest growth for the United States. The “flash” PMI – which is an advance measure of the final PMI data using 85 to 90 percent of the total responses – edged slightly higher from 51.7 in July to 51.9 in August. A small increase was observed in output and new orders, which helped to push the composite figure higher. Pricing pressures also continue to ease.

Still, it is important to keep in mind that manufacturing activity remains sub-par. According to their press release, August’s PMI is the “third-lowest reading in 35 months.” This includes having employment growth at its slowest pace in a year and a half. Not only were many of the components decelerating from earlier in the year, but some of them were shrinking outright. For instance, new export orders remain virtually unchanged at 48.7 in August, with values under 50 suggesting contracting activity.

Falling export orders are the result of slowing global activity. The Markit Flash Eurozone PMI was mostly unchanged, up from 46.5 in July to 46.6 in August. This was the seventh consecutive monthly contraction, with the Flash Eurozone Manufacturing PMI at 45.3. New orders and employment continue to fall, as the continent grapples with the economic consequences of its sovereign debt crisis.

This includes even the strongest economies globally. The Flash German Manufacturing PMI is currently 45.1, up slightly from 43.0 last month. The key point is that manufacturing remains very weak, with similar findings in France (46.2) and China (47.8). The coming weeks will bring new data on other countries, as well. For China, the Flash Manufacturing PMI figure was the lowest in nine months, with falling new orders, exports, and employment. Its press release says, “… Chinese producers are still struggling with strong global headwinds.”

Indeed, these figures provide further evidence that the global economy is slowing, and while the U.S. manufacturing sector continues to have modest gains, there are significant headwinds on the horizon. The Institute for Supply Management, which also produces a PMI report, has found that the U.S. manufacturing sector has contracted for two consecutive months, led by declining new sales. As such, we will be closely looking at the latest ISM figures, which will be released on September 4^th, to see how the slowing global economy and uncertainty domestically impact U.S. manufacturing activity.c

Chad Moutray is chief economist, National Association of Manufacturers.

The Bureau of Economic Analysis and the Census Bureau reported that the U.S. trade deficit grew from $50.4 billion in December to $52.6 billion in January. Americans imported $233.4 billion in goods and services for the month (up from $228.7 billion the previous month) and exported $180.8 billion (up from $178.2 billion). This was the third consecutive month of a widening trade deficit, and the highest that it has been since October 2008.

A widening of the deficit for petroleum was the largest factor behind this month’s higher overall deficit. Exports of petroleum dropped from $10.6 billion to $9.4 billion; at the same time, imports grew from $37.8 billion to $39.1 billion.

The trade deficit for goods widened in the month, while there was a modest improvement in the services sector. The value of U.S. manufactured goods exported in January was $77.2 billion, down from $83.0 in December. Despite the decline, exports are still up overall from the $70.8 billion registered in January 2011.

Among goods exports, areas of strength included capital goods excluding automotive (up $1.3 billion), automotive vehicles and parts (up $1.05 billion) and foods, feeds and beverages (up $97 million). Declining exports were found among industrial supplies (down $295 million), consumer goods (down $215 million) and other goods (down $548 million). Meanwhile, the largest increases among goods imports were found in automotive vehicles (up $2.4 billion), industrial supplies (up $1.1 billion) and foods, feeds and beverages (up $437 million).

One of the things that definitely stands out with these numbers is the impact of slowing global growth. This is clear with both Europe (with exports falling from $27.2 billion to $24.5 billion) and China (down from $10.1 billion to $8.1 billion). Europe is currently in a recession, and China just announced slower growth targets for this year.

Overall, these figures show that exports have slowed recently due to weaknesses in the global economy. With import growth outstripping export growth, our trade balance has widened. For manufacturers – which contribute 60 percent of our total exports – it will be important for us to regain our footing by selling more of our goods overseas.

This, of course, will hinge on faster growth around the world, but it will also depend heavily on adding new markets and exploring new opportunities abroad. For this, policymakers can be helpful. Among their top priorities: getting the Export-Import Bank reauthorized. Beyond that, Washington should work to expand the number of trade agreements for greater access to new markets.

Chad Moutray is chief economist, National Association of Manufacturers.