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The Global analysis of the Purchasing Managers’ Index (PMI) for manufacturing produced by J P Morgan using the data from IHS Markit reflected the general improvement in most countries and regions in December and the global reading of 53.8 is one of the highest over the past decade.  This article only refers to the PMI for the manufacturing sector.

The UK PMI increased to 57.5 in December, its strongest positive rate since November 2017, although the are a couple of one-off factors that are driving this figure.  New orders and output were boosted by companies increasing demand ahead of the end of the Brexit transition period and all the uncertainty that generated.  The other issue was port delays - there were problems at Felixstowe and to some extent Southampton through most of the month - which led to delays int eh supply chain.  We have seen before that the PMI interprets a fall in supplies as a positive figure (because it sees this as being driven by higher demand), so this has artificially improved the UK’s PMI reading.

There was also an improvement in the PMI in the Euro-zone where the reading of 55.2 is at its highest since May 2018, although it is slightly lower than anticipated in the pre-Christmas flash data.  There was a strong improvement compared to November in Ireland, Greece (although this is still below 50) and Netherlands but the smallest improvement was in Germany;  however, the latter remains the strongest PMI reading among the Euro-zone countries covered.  Another important point to note is that in the Euro-zone, it is the investment goods sub-sector that is showing the strongest improvement in activity.

Elsewhere in Europe, the generally positive story was repeated with the exception of Turkey where the PMI fell a little from the November level but the reading remains positive at 50.8.  There was a strong improvement in the PMI reading for Sweden which, at 64.9 and 5.1 points higher than the previous month, was both the highest overall PMI and the largest improvement in our analysis.  Despite a significant improvement over the November reading, Russia remains just in negative territory at 49.7.

The levels of improvement in Asia were lower than in Europe with Taiwan, the ASEAN region and Japan (which had a PMI of exactly 50, its highest reading since April 2019) seeing an improvement compared to November.  India also had a very marginal improvement and the PMI reading for South Korea was unchanged over the November level, while China reported a significantly lower PMI at 53.0 (54.9 in November).

The most mixed picture is in the Americas.  Canada and, to a lesser extent, the USA saw the PMI improve compared to November but Mexico (which was already the weakest of the countries we cover) saw the PMI slip further to 42.4;  finally, although Brazil saw the largest fall in the PMI reading compared to November, at 61.5, it continues to indicate a strong growth in manufacturing activity.

The IHS Markit PMI reports for major economies around the world are available from their web-site at;  we have compiled a set of summary charts which is available to download below.

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