The flash manufacturing sector Purchasing Managers’ Index (PMI) numbers for March showed a further fall for the UK, which is now at its lowest since September 2023, while the readings for the Euro-zone, France and Germany improved, while remaining negative. The USA dipped back below the crucial 50 threshold for the first time in 3 months.
With the final numbers due out early next week, we will just take a quick look at the flash results but what stands out the most is the contrast between the further weakening in the reading for the UK at the same time as the European figures pick up (although both are still in negative territory). The UK flash manufacturing PMI fell back to 44.6, mainly due to a significant weakening of output which fell at its fastest rate since October 2023 and for the 5th month in a row. Moreover, in the face of rising global uncertainty and potential US tariffs, export sales fell at their fastest pace since August of that year.
The USA saw the positive manufacturing PMI that we saw in the first two months of this year slip back to 49.8 as manufacturing output declined. February had been particularly strong, so there may be a timing issue here but factories also reported fewer instances of front running ahead of tariffs and new orders growth all but stalled.
In contrast to the UK, the Euro-zone appears to be improving with the overall PMI at a 26-month high of 48.7, although it should be noted that this still implies contraction of activity overall. Driving this was an increase in the output element which took that to 50.7, the highest for this element in 34 months.
Within the Euro-zone, both France and Germany had less bad manufacturing PMI readings, although the difference is that while output was still falling in France (although at the slowest pace for 34 months), Germany recorded an increase in output in the sector.
The other countries with a flash reading of the manufacturing PMI are in Asia and there is a mixed picture here. The weakest was Japan where the overall PMI slipped to 48.3, its lowest for a year with both output and new orders declining at a faster pace than in February. There is a more positive story for Australia where the manufacturing PMI picked up to 52.6, which was a 29 month high supported by growth in both output and orders, although export sales declined. Finally in this region, India continues to lead the way, with a further improvement in its manufacturing PMI to 57.6, almost reversing the reduction in the pace of growth that we saw in February.
You can access the individual country reports on the “PMI by S&P Global” website at https://www.pmi.spglobal.com/Public/Release/PressReleases or on request from MTA.