The latest set of results for the manufacturing Purchasing Managers Index (PMI) data was somewhat mixed. The overall global figure improved to exactly the 50 threshold value, moving from negative territory for the first time since June. With some exceptions, European countries, including the UK, generally saw a weaker reading than in October while those in Asia and the Americas improved, although not necessarily into positive territory.
The improvement in the Global Purchasing Managers Index (PMI) for manufacturing, produced by S&P Global and sponsored by J P Morgan, to the neutral reading of 50.0 came as both output and new orders showed mild growth but it was also helped by the perverse effect of lengthening suppliers delivery times; with employment and stocks of purchases falling, it is this effect from the measure of delivery times that makes the difference to the headline for November. There is also a note of caution from the breakdown of the output trends, with production at consumer and intermediate goods manufacturers increasing while the investment (or capital) goods companies continue to report a decline.
Turning to the UK, the manufacturing PMI fell even further than had been suggested in the flash report last week, with the final November figure of 48.0 being the lowest since February. However, the only positive contribution was from lengthening suppliers delivery times which were the result of continuing supply chain pressures and shipping delays rather than rising demand for inputs, so the “true” figure should be even lower. Both output and orders fell at an accelerated pace although there is a different sectoral picture for the UK with the decline in orders being led by the intermediate goods sub-sector (it also fell in the other two groups but not as rapidly).
The Euro-zone also saw the PMI for manufacturing slip again in the latest numbers, although in this case the reading of 45.2 is not quite as bad as the September figure. It was, however, lower than the average over the current run of negative readings which began in July 2022. Generally, it is the capital goods industries in the Euro-zone who are the hardest hit, although the press release notes that Spain’s companies in this sub-sector bucked this trend with an acceleration of growth. The fall in new orders seems to be mainly in export demand (this includes intra-EU business).
By country, six of the eight Euro-zone countries saw their manufacturing PMI lower than in October – the exceptions were Austria which picked up strongly but only to 44.5 and Germany which was unchanged at 43.0 and, as a result, continues to have the lowest reading across this analysis; this is only fractionally behind France and Italy, which illustrates the issues in the Euro-zone’s manufacturing sector. Only Spain and Greece have a positive manufacturing PMI in November.
The picture in the rest of the Europe is similar, although there are a couple of more positive stories. Among the other EU countries, Czechia (46.0), Poland (48.9) and Romania (48.0) all saw their already negative readings slip further while Hungary (50.3 and above the threshold for the first time since May) and Sweden (53.8) registered a higher figure than in October.
Outside the EU, Switzerland (48.5) recorded a fall in its manufacturing PMI with the mini rally over the summer not quite managing to get above 50 before it expired; meanwhile, Turkiye (48.3) recorded its best PMI since May and Kazakhstan (53.5) also saw an improvement compared to October.
The picture in Asia is much brighter with Australia (49.4), the ASEAN region (50.8), China (51.5), South Korea (50.6 – back in positive territory for the first time since August) and Taiwan (51.5) all recording an improvement on their October figures, with only the first of these still below 50. That situation is shared by Japan (49.0) whose manufacturing PMI fell back slightly in November and is at its lowest since March); however, in contrast, despite a decline compared to October, India (56.5) still has the highest reading in our analysis.
Finally, the Americas is also a generally positive story with only Brazil (52.3) seeing a weaker number than in October; for the USA (49.7) and Mexico (49.9), their improvement was not quite enough to move them above the crucial 50 threshold, while Canada (52.0) and Columbia (53.4) extended their already positive figure.
We have already noted the highest (India) and lowest (Germany) readings this month. The most significant improvement compared to October was in Austria and Turkiye (both up by 2.5 points), closely followed by Hungary (+2.4 points) and South Korea (+2.3); the largest reductions came in Italy (down by 2.4 points) and the UK (-1.9).
The manufacturing PMI is a weighted composite index of new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%).
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).