The flash manufacturing sector Purchasing Managers’ Index (PMI) numbers for January are being released today, with mixed trends being reported. The UK saw a less negative reading than at the end of 2024, in a trend that was shared in the Euro-zone and Australia. Japan was the only country where the manufacturing PMI fell, while India remains the global star performer.
The flash Purchasing Managers’ Index (PMI) for the UK manufacturing sector rose to 48.2 (from 47.0 in December and the best since last October) thanks mainly to an improvement in the output element which almost made it to the neutral position of 50. However, manufacturers saw order books shrink for the 4th month in a row, partly because the improvement in output was largely explained by efforts to complete unfinished work.
Employment also fell although, interestingly, the pace of decline for manufacturing was less rapid than for the service sector; there might be a seasonal element to this with staff hired for the holiday period seeing an end to their contracts, but the survey also attributes this to the budget announcements.
Although still firmly in negative territory, there was also an improvement in the manufacturing PMI in Europe. The Euro-zone figure rose from 45.1 in December to 46.1 at the start of 2025, helped by the pace of decline in output easing to its slowest rate since May 2024. New orders and employment continue to fall and there is a small, but perverse boost to the index from a lengthening in suppliers delivery times.
We only have individual country figures for France and Germany at this stage of the reporting and it was these two that led the “improvement” in the Euro-zone. There was a sharp increase in the French manufacturing PMI but at 45.0 it is still well below the key threshold of 50; this was driven by a noticeable slowing in the pace at which output is contracting and the survey also recorded markedly weaker declines in new orders. There was a similar but less dramatic improvement in Germany where the manufacturing PMI recovered to 44.1 which is their highest reading since May 2024. Again, the pace at which both output and new orders are falling slowed.
We have three countries with flash releases of their manufacturing PMI in Asia, all with different trends. Australia got close to a neutral outcome with its reading reaching 49.8 (47.8 in December) which is the highest since January 2024, with the output element exactly on the threshold value. In contrast, Japan saw a small deterioration with their manufacturing PMI falling back to 48.8 – here, this is the lowest value since March 2024; the pace of decline in output and new orders both fell but employment increased. Finally, India continues to top the charts with their flash reading rising to 58.0 (their highest since July 2024) as factory orders rose at their fastest pace for 6 months.
Because of our publishing schedule, the figures for the USA aren’t published until this afternoon but you can access those, and all the other reports on the “PMI by S&P Global” website at https://www.pmi.spglobal.com/Public/Release/PressReleases or on request from MTA.