The latest flash Manufacturing Purchasing Managers Index (PMI) readings were all in positive territory, though only marginally so in some cases. The UK’s Manufacturing PMI edged down to 51.4 in March, remaining in expansion but declining for a third consecutive month from January’s 17-month high of 51.8.
UK manufacturers cited weaker global demand linked to Middle East conflict, although export orders still rose slightly. Price pressures and supply concerns led some customers to pre-buy and build inventories. Supplier performance deteriorated sharply, with around a quarter of firms reporting longer delivery times; the worst since July 2022. Delays were driven by rerouted Asia-UK shipping via the Cape of Good Hope and petrochemical disruption in the Middle East. While longer delivery times mechanically support the PMI, in this case they reflect disruption rather than stronger demand.
In the euro area, flash Manufacturing PMI rose to a 45-month high of 51.4. Output increased modestly, though at a slower pace than in February. The Middle East conflict pushed up input costs and extended lead times, with delivery delays reaching their greatest extent since August 2022.
Germany’s flash Manufacturing PMI climbed to 51.7, also a 45-month high, supported by the fastest production growth in over four years and stronger new orders. Some firms reported stockpiling behaviour to mitigate potential supply disruption. As elsewhere, longer supplier delivery times boosted the headline PMI despite reflecting logistical strain.
France’s flash Manufacturing PMI rose slightly to 50.2, just inside expansion territory. However, manufacturing output declined again. Unlike Germany, firms reported hesitancy among clients, citing both geopolitical uncertainty and recent local elections. Delivery delays linked to the Middle East were also noted.
In the US, flash Manufacturing PMI increased to 52.4, with output and new orders strengthening and export orders stabilising after prolonged decline. Japan’s rating eased to 51.4, while India’s fell to a four-and-a-half-year low of 53.8 amid rising cost pressures. Australia’s rating also declined, remaining only just above the neutral 50 mark.
You can access all of these reports on the “PMI by S&P Global” website at https://www.pmi.spglobal.com/Public/Release/PressReleases or on request from MTA.