The Purchasing Managers’ Index (PMI) for manufacturing in the UK fell back in the latest reading but at 57.1 it is still indicting a significant expansion in activity in the sector. However, there are some notes of concern in that both output and new orders increased at the slowest pace since February and supply chains delays along with shortages of both materials and labour also contributed to this trend. At the sub-sector level, investment goods had the highest PMI, with both consumer and intermediate goods falling to only a little above the crucial 50 level.
In the Euro-zone, there is a similar picture of a lower manufacturing PMI than in August but still at a strongly positive level. The exception to this was Austria where the latest figure was up on the previous month at 62.8. Also like the UK, while output, new orders and employment remained firmly in expansion territory, they were all lower than in the previous month - for the first two of these measures, the pace of expansion was the slowest for 8 months. Shortages of electronic components and raw materials were widespread and contributed to further lengthening of suppliers delivery times - this has the effect of artificially boosting the PMI but not to the extent that this changes the direction of the trend.
There is more variation in the rest of Europe with Russia, Sweden and Switzerland all seeing an increase in the PMI reading in September; however, while the latter two are at well over 60, the improvement in Russia was not quite enough to lift it back into positive territory with the PMI improving only to 49.8. The other European countries that we cover - Czech Republic (58.0), Hungary (52.1), Poland (53.4) and Turkey (52.5) - all had a lower PMI than in August but were all still above 50.
In Asia we have a more mixed picture but there was an increase in the manufacturing PMI for India, South Korea, China and the ASEAN region; for the latter two of these, this moved the index from negative territory to a reading of exactly 50 while India and South Korea saw an improvement on their already modest positive numbers. For Japan and Taiwan, there was a fall in the manufacturing PMI but, again, these remain in positive territory.
Publication schedules mean that we don’t have the figures yet for the USA, Brazil, Canada & Mexico – these will be published later today and you can get them (and all the reports) from the IHS Markit PMI web-site at https://www.markiteconomics.com/Public/Release/PressReleases; We have prepared a summary charts report which you can download below and we will update this next week with the data for the Americas