The Global Purchasing Managers’ Index (PMI) for manufacturing produced by J P Morgan using the data from S&P Global improved to 50.1 in January, its highest level since June 2024. A majority of countries saw an improvement and, while those in Asia and the Americas are above 50, most European countries, including the UK, are still in negative territory.
As noted above, the overall global index was above 50 for the first time in 7 months (although it had been exactly on that mark last November) with both output and new orders having a positive impact on the index. Employment and stocks of purchases continue to decline while there was a perverse stimulus to the index from lengthening of suppliers’ delivery times. By sector, both consumer and intermediate goods industries were indicating an expansion of activity but capital (or investment) goods manufacturers remain weak with output and new business both falling for the 8th consecutive month.
The UK manufacturing PMI moved up from the December level, but the January reading of 48.3 is only indicating a slower rate of decline in activity. Output fell for the 3rd consecutive month, although the January rate was the slowest paced of this negative run; in contrast to the global picture, it was weakness in the consumer goods industries that outweighed a return to growth in production for both the intermediate and capital goods sub-sectors. New orders also remain negative amid reports of the recent budget announcements raising concerns about costs and reducing confidence; both home and export demand were negative in January, the latter element extending its run in this position to 3 years. Finally, supply chains remained under stress from increased shipping times, the Red Sea crisis, backlogs at ports, container shortages and regulatory issues; this contributed to longer lead times which, perversely, has a positive impact on the calculation of the PMI.
The manufacturing PMI for the Euro-zone moved up to an 8-month high of 46.6, although this is still quite a significant pace of contraction in activity. Both output and new orders (including export markets) contracted at the slowest pace since May 2024 although there was a small increase in the pace of decline for employment (this is not unexpected as this often lags the cycle). Five of the eight Euro-zone countries saw an improvement in their manufacturing PMI although, ironically, Spain and Greece, which are two of the three countries (Ireland is the other one) to have a reading above 50, were not in this group. Despite seeing their PMI increase to 45.0, France and Germany share the distinction of having the lowest reading globally in this analysis; Spain shares with Kazakhstan the position of seeing the largest fall compared to December with a reduction of 2.4 points.
There were mixed trends and positions among the other EU countries, with Czechia and Poland improving their PMI level but remaining in negative territory, while Hungary and Romania saw a reduced figure, with the former of these two slipping back below the 50 threshold. The best position was in Sweden which improved its already positive figure.
The other three European countries that we cover – Kazakhstan, Switzerland and Turkiye – all had lower readings than in December; for the latter two of this group, that meant a more negative reading but despite (as already noted) having the joint largest reduction in their manufacturing PMI, Kazakhstan was still above the 50 threshold.
The picture in Asia is more encouraging with only Japan having a manufacturing PMI below 50, although they, China, Taiwan and the ASEAN region all saw a lower reading than in December. Australia and South Korea both recorded an improved manufacturing PMI that took them into positive territory and India, extended its run as having the strongest reading in this analysis with its best figure since last July.
Similarly, in the Americas, only Mexico had a contractionary PMI, with a lower reading than in December; Canada was the only other country in this region to see a lower level in January but they remain above the 50 threshold. That position is shared by Brazil, Columbia and the USA, with the last two of these both moving from negative to positive territory this month – Columbia had the largest improvement in this report between the December and January readings at 3.9 points.
Overall, across our 28 countries and 2 regions (not counting the global aggregate), exactly half (15) were above the 50 threshold indicating an expansion in activity in their manufacturing sector, with the other 15 below that mark.
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).