Global factory expansion ends

Kia ora,Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news that global factories are no longer expanding as fast as we head into the last two months of 2022.But first, there was another sizeable fall in dairy prices at the auction earlier today. Overall prices fell another -3.9% in USD terms, and on the rising Kiwi dollar, prices were down a substantial -6.6% in NZD terms. These falls are mounting up now. Very weak Chinese demand, including from their foodservice industry is kneecapping these commodities. SMP was down -8.5%, WMP was down -3.4%. All this is happening despite falling global milk production. Overall prices are now back to levels we last had in January 2021 with the bull run well faded. We are down -30% from the peak in March 2022. Non-one is talking about a "commodity super-cycle" anymore. In fact, farm gate payout forecasts will undoubtedly start to be trimmed now for the upcoming season.Meanwhile, American retail sales are still holding up. On a same-store basis, sales last week were up +9.7% from year-ago levels with is a stronger gain than the prior week.But American factories are not expanding as fast as they once were, in fact now barely at all. Both PMIs for October out today record a minor expansion only. The widely-watched local one reports a slowing on new order intake, falling export orders, and prices that are not rising anywhere near as fast. The Internationally-benchmarked Markit one reports similar conditions. Their logistics LMI confirms a fast easing of supply-chain pressures.Meanwhile, their September JOLTS report shows September job openings increases; hires edged down, and total separations decreased. If those conditions extended into October the upcoming non-farm payrolls report for October will be on the upside of the currently expected +200,000 employment gain.And American construction spending unexpectedly rebounded in September, amid a surge in investment in nonresidential structures that offset a further decline in housebuilding.In Japan, their Markit PMI fell away to only a minor expansion, reporting new orders and output growth declined further in October.The private Caixin factory PMI in China wasn't as negative as the official one, but it was already contracting in September and stayed contracting in October.In contrast in India, their factory expansion rolls on at a good pace with new order growth and production strong and inflationary pressures mild in OctoberThe Australian PMI for October remains good by international standards, but demand and ou