There was a mixed set of results in the Purchasing Managers’ Index (PMI) for manufacturing that was published by J P Morgan using the data from S&P Global. While the global average eased to 51.3, this was still the second highest since June 2022. Given the events in the Middle East, this apparent strength might seem surprising but closer analysis suggests a couple of things are driving this.
The global figures show that both orders and output were positive, while employment was neutral. The growth in demand is, perhaps, surprising but seems to have been a short-term reaction in a majority of countries (but not all) with customers advancing purchases in anticipation of shortages and possible price rises.
The other factor which has, all other things being equal, boosted the PMI readings in many countries is extended delivery times from suppliers. This makes a positive contribution to the PMI calculation because it is assumed to be because suppliers are busy, so adding to activity levels (which is what the PMI measures). The problem is that in most cases at the moment, the longer delivery times are reported to be, at least in part, because of shipping delays, for either inputs or finished goods; it should, therefore, have lowered the PMI figure.
Turning to the UK, although lower than in February, there was a positive reading (51.0) for the 5th consecutive month despite the output element slipping below the key threshold. This was mainly in the intermediate goods category, with consumer goods and, for us most importantly, investment goods seeing a small increase in production.
However, despite the rising uncertainty noted as a factor for output, both total and export orders improved, albeit at a slower pace than in February. Overseas demand was strongest from the USA, Europe and China. The other factor that boosted the UK manufacturing PMI in March was a significant lengthening in suppliers delivery times, mainly due to shipping issues – see above for an explanation of why this is a false boost to the PMI.
We see a similar effect in the Euro-zone where the PMI reading went up to a 45-month high of 51.6, despite the pace of output growth being broadly the same as in February. The boost to the overall figure came from the lengthening of suppliers delivery times, with input prices rising at their fastest rate since October 2022. Reference to the report for Germany shows that they saw the highest PMI since May 2022, driven by stronger output and orders from customers who were “looking to mitigate disruption from the conflict”.
Overall, of the 8 Euro-zone countries, only Spain had a PMI reading below the 50-threshold, although France was exactly on this mark. Compared to February, six of the countries had higher values, with Spain and France the exceptions, although Greece was only fractionally higher.
There were similarly mixed outcomes in the other 5 EU countries that report a PMI for the manufacturing sector. Despite improvements compared to February, Romania and Poland continue to have negative readings, while Czechia, which had been exactly 50 last month, moved solidly into positive territory. Sweden saw a slight improvement to its already strong readings but Hungary slipped back while still being positive.
Elsewhere in Europe, there was a significant divergence in fortunes for the 3 countries in this group which all had negative readings in February. Switzerland had the strongest turnaround and moved into positive territory for the first time since December 2022 as both production and new orders surged, although the index was also helped by lengthening delivery times. On the other hand, Türkiye and Kazakhstan both saw their manufacturing PMI fall further, reaching their lowest points since October 2025 and March 2022 respectively.
There is an interesting contrast between trends and levels in Asia where we cover 7 countries and the ASEAN grouping. In this group, South Korea was the only one to have a higher PMI than in February, but they all remained positive, apart from Australia which dipped below the 50-threshold for the first time since last October. There was an interesting comment in the Japanese report which noted that although the overall pace of growth in output eased (while still positive), investment goods producers “recorded the sharpest improvement in conditions”.
There is a more mixed picture in the Americas; the two countries with sub-par readings in February – Brazil and Mexico – both recorded an improvement but not by enough to move them above 50, while Columbia remains in positive territory despite a lower PMI this month. Canada had a similar downward movement that took their reading down to exactly 50.0. Finally, the USA reading improved modestly thanks to domestic demand driven by the building of “safety” stocks and attempts to get ahead of price rises.
Across the 29 countries and 2 regions (note that we also cover the 8 Euro-zone countries separately but the ASEAN group is only reported at the aggregate level), 21 were in positive territory (including the UK), Canada and France were exactly on the threshold at 50.0 and the other 8 reported a contraction in activity. The strongest reading was Sweden at 56.3 and the weakest was Romania at 46.6. Compared to the February readings, 16 were higher and 15 lower; the strongest riser was Switzerland (up by 5.9 points), with India having the largest decline (down by 3.0 points). 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).