The Global Purchasing Managers’ Index (PMI) for manufacturing, produced by J P Morgan using the data from S&P Global, returned to positive territory for the first time in 3 months with a reading of 50.3. Both output and new orders were above the 50 threshold but there was also a positive contribution from lengthening suppliers delivery times.
Despite this, there was a mix of trends and levels across the 29 countries and 2 regions that we cover in this report. At the global level, the improvement in output came mainly from investment and intermediate goods sub-sectors, although consumer goods were also better than in May. Employment continues to fall at a global level, although this is not a surprise as this factor often lags behind the general business trend.
For the UK, the manufacturing PMI was still negative at 47.7 but the pace of decline continues to ease both overall and in the output, new orders, employment and stocks of purchases elements. We are also seeing a similar effect from lengthening supplier delivery times in the UK calculation – this has a positive impact on the index calculation but it is currently caused by shipping disruption which means it should be a negative. The latest reading for the UK is the highest since January.
For the Euro-zone, where in addition to the regional data we also track the values for the 8 individual countries, the overall manufacturing PMI edged up marginally compared to May and, as a result, has reached its highest level since August 2022. This came despite a lower element for output, although it remains positive; new orders stabilised in June, but employment and stocks of purchases were negative.
At the country level, 4 are above the 50-mark (Ireland, Greece, Spain and the Netherlands) and 4 are below it (Austria, France, Italy and Germany) but with a mix of trends compared to the May readings. There was a significant improvement for the Netherlands and Ireland, with smaller but still noticeable improvements for Spain and Germany; the reading in Greece edged down marginally, with larger reductions in Italy, Austria and France. Given the size of the sector in some countries, it is worth noting that while the manufacturing PMI in Germany was at its highest for 34 months, the French and Italian readings were at 4 and 3 month lows respectively.
There is a similar mix of trends among the other EU countries. Czechia had the largest improvement compared to their May reading and this took them into positive territory for the first time since May 2022 while there was a marginal increase for Romania, although they are still below the threshold. Sweden saw a fall in its manufacturing PMI but this is still above 50, and there was also a fall in the already negative figures for Hungary. The most notable trend in this group is for Poland which saw both the largest reduction in the manufacturing PMI compared to May (down by 2.3 points) and the weakest individual reading (44.8) across this report.
The other notable change is also in Europe, but outside of the EU, with Switzerland seeing a +7.5 points increase (the largest in this report) in its manufacturing PMI; however, thanks to having a very low reading in May, this only took the level to 49.6, just under the threshold. The other two countries in this group saw a fall in their PMI – for Turkiye this meant their weakest reading (46.7) since last October, while the larger reduction for Kazakhstan, meant they had their first negative result since February 2024.
The picture in Asia was also a mixture of both trends and levels; India continues to have the strongest reading in our report and this improved to its highest level since April 2024. There was also a higher reading in China, Japan and South Korea, with the first two of these moving into positive territory as a result, while the latter is still sub-threshold. Australia and Pakistan remained above 50 despite a lower reading than in May, while Taiwan and the ASEAN region had more negative readings than in May for the lowest values since December 2023 and August 2021 respectively.
Finally, across the Atlantic, only the USA saw an improvement in their manufacturing PMI reading compared to May, extending their run of positive readings to 6 months with the highest figure since September 2022. Columbia had a lower but still positive reading, with the negative levels in Brazil, Canada and Mexico all weakening further.
Overall, across our report and excluding the global aggregate, only 13 countries were above the 50 threshold indicating an expansion in activity in their manufacturing sector with the other 16 and both regions being in negative territory. There were 14 who had a higher manufacturing PMI than in May and 17 where it was lower.
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).