Completing the picture for the October data from the Purchasing Managers’ Index (PMI) for manufacturing in October, the overall Global reading improved this month to 49.4, although this is now the 4th consecutive month that it has been in negative territory. The missing European data was mostly negative (Spain is the exception) but India remains as a bright spot in the global manufacturing picture.
The main factor driving the global calculation was a decline in orders, although employment and stocks of purchases (the latter two have lower weights) were also negative. For orders, some growth in the consumer goods sub-sector was outweighed by the investment and intermediate goods groups, although the pace of contraction slowed in both cases.
Output was stable at the September level and the PMI was moderated by the false positive from a further lengthening of suppliers’ delivery times – this is caused by stressed supply chains which should be a negative but the calculation assumes that this has happened because the suppliers are busy and, therefore, makes a positive contribution to the calculation.
One of the missing datasets from last Friday was the Euro-zone, with the figures for France, Germany, Italy and Spain not released until this week. The manufacturing PMI for the region as a whole improved – or, more accurately, was less negative – with a reading of 46.0 which is its highest since May, although it is now 28 months (June 2022) since it was above the 50 threshold. At the regional level, the output element, while still strongly negative, was less so than in September and there was also a slower pace of decline for new orders and employment.
The weakness is led by the two largest Euro-Zone economies – France and Germany – although there were different trends for them this month with the former seeing the pace of decline edge down while there was a small improvement for Germany. The manufacturing PMI for Italy also deteriorated further but the already positive reading in Spain improved to be at its highest level since February 2022 (towards the end of the post-Covid “boom”).
There were also contrasting fortunes for the other EU countries whose data was out this week; Hungary saw an acceleration in the rate of decline with their lowest reading since September 2023 while Poland’s PMI, while still negative, improved to their highest level in their 30 month run of negative readings that started in May 2022.
The two missing pieces in Asia were the ASEAN region where the reading was unchanged at 50.5 and India; the latter continues to lead the way with its manufacturing PMI picking up to 57.5 after an 8 -month low in September that was still the strongest in our analysis.
Because of the publishing schedules we missed all the Americas in our report last week and here there was generally good news with only Brazil having a lower reading than in September but this was still clearly in positive territory. Mexico and the USA registered an improvement but both of them were below 50, while Canada and Columbia also did better than in September and were in positive territory – the latter moving above the threshold for the first time since March
Overall, the highest reading in the 30 countries/regions that we monitor continues to be India at 57.5, followed this month by Spain and Brazil; at the other end of the spectrum, the lowest manufacturing PMI was in Austria, with Germany and France not much better. Compared to September, the largest improvement was in Columbia which moved up by 4.2 points while Hungary had the largest reduction with a reading that was down by 1.8 points (the UK, with a fall of 1.6 points was the next largest faller).
The individual S&P Global PMI reports are available to download on their website 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).