February saw the Global Purchasing Managers’ Index (PMI) for manufacturing, produced by J P Morgan using the data from S&P Global, improve again to stand at 50.6. The general trend was to see a higher reading than in January but with a few notable exceptions, including the UK, where the PMI fell to 46.9 (the lowest since December 2023).
At the global level, the improvement was driven by growth in both output and orders, although both input costs and selling prices rose at a faster pace. The index was also helped up by a lengthening of suppliers’ delivery times but was balanced by another decline in both employment and stocks of purchases. There is a small caveat for companies in the MTA family in that the growth in output was concentrated in the consumer and intermediate goods industries and was only stable for the investment goods industries, although the latter does follow 8 months of contraction. New orders rose at the fastest pace since March 2022, although there was a small decrease in export orders.
In contrast to the global picture, the UK saw its manufacturing PMI fall again in February to a 14-month low of 46.9 – this is the 5th consecutive sub-50 reading for the UK and the weakest in that run. This came as the pace of decline in both output and new orders accelerated and employment fell at the fastest pace since the pandemic. The fall in orders was exacerbated by export demand, which was reported to be weak from Brazil, Europe (with specific references to Germany), the Middle East and the USA. All three of the sub-sectors shared in this decline, with consumer goods seeing the largest reductions for output, orders and employment (again in contrast to the global picture). Longer lead times from suppliers was attributed to a range of factors including shipping delays, port disruption, customs delays and vendor capacity issues.
As usual, we begin our look at the rest of the world in the Euro-zone where the PMI reading reached its highest level for 2 years, although at 47.6, the manufacturing sector remains firmly in contraction mode. Output was only just negative and the fall in orders was at the slowest pace in nearly 3 years; however, employment (which often lags the cycle) fell at its fastest pace for 4½ years). Most of the 8 countries in this region saw a higher manufacturing PMI than in January but only Ireland and Greece were in positive territory, with the Netherlands exactly on the 50 threshold; the exceptions to the trend were Spain (where the PMI dipped just below 50 for the first time since January 2024) and, marginally, Greece. Despite seeing an improvement, France continues to have the lowest PMI in this report.
All of the other 5 EU countries who have a PMI survey saw an improvement compared to January, with Poland moving above the 50 threshold to join Hungary and Sweden in seeing activity in their manufacturing sector expand, leaving only Czechia and Romania in negative territory.
We see a similar picture in the other three European countries that we cover with Kazakhstan, Switzerland and Turkiye all having higher readings than in January, although only the first of these is above the 50 threshold.
The trends for Asia were more mixed with month-on-month improvements for the ASEAN group, Australia, China, Japan and Taiwan balanced by lower figures for India, Pakistan (new to the report this month but not yet on our charts – see below) and South Korea. In terms of the levels, India continues to lead the way both regionally and globally with the highest manufacturing PMI figure in this report (56.3) despite this being the weakest figure for them since December 2023; ASEAN, Australia, China, Pakistan and Taiwan are also in positive territory, leaving only Japan and South Korea below the 50 mark (the latter only marginally so) in this region.
It is in the Americas where we see the greatest variation. Brazil and the USA saw an increase in their already positive manufacturing PMIs in February with the former of these having the largest rise across this report (+2.3 points). In contrast, Canada, Columbia and Mexico all saw significant reductions, with the first two of these tipping below the expansion / contraction threshold in February – indeed, Columbia (-4.8 points) and Canada (-3.8 points) had the largest falls across this report.
Overall, across our 29 countries and 2 regions (not counting the global aggregate), 15 were above the 50 threshold indicating an expansion in activity in their manufacturing sector, 1 (the Netherlands) was exactly on that mark and the remaining 15 were below 50.
The individual S&P Global PMI reports are available to download on their web-site at https://www.pmi.spglobal.com/Public/Release/PressReleases but we also have a summary charts report which is available to download below. You should note that the PMI readings for Hungary, Sweden and Switzerland are not compiled by S&P Global but can be found with an appropriate internet search (it also means that they are not part of the global PMI calculation).