Theme of the Day: Global Manufacturing PMI rises to near four-year high in February

Output and new order growth strengthen. Business optimism rises to 21-month high. Input cost inflation accelerates. Feb saw business conditions in the global manufacturing sector improve to the greatest extent since Jun 2022, as rates of expansion in output and new orders gathered pace. Business optimism also rose to a 21-month high. The upturn remained uneven, however, with stronger output growth (on average) in Asia and Europe contrasting with a slowdown in North America. The J.P. Morgan Global Manufacturing PMI rose to a 44-month high of 51.9 in Feb, up from 50.9 in Jan. The PMI has posted above the neutral 50.0 mark in each of the past seven months. Manufacturing production rose at the quickest pace since Dec 2021. Output rose across the consumer, intermediate and investment goods sectors, with rates of expansion improving in the latter two (to 55- and six-month highs respectively). Growth held steady at January's 12-month high in the consumer goods category. The top five spots in the national output growth rankings were all held by Asian economies, helping push the ASEAN PMI in particular to the highest recorded since comparable data were first available in 2012. The fastest production growth was recorded in India, followed by Vietnam, Thailand, the Philippines, and Taiwan. Generally faster rates of expansion in Asia and Europe contrasted with weaker growth in North America. The rate of increase in output in the US slipped to a five-month low, Canada stagnated and Mexico saw production volumes contract for the twentieth consecutive month. Growth of incoming new orders hit a four-year high in Feb, as companies benefited from stronger demand including a rise in new export business. International trade volumes rose for the first time since Mar 2025, with increases in mainland China, Japan, the UK, Taiwan, and South Korea (among others). The US and the euro area both saw new export business decrease. Business optimism among global manufacturers climbed to a 21-month high in Feb and was above its long-run average for the first time since Mar 2024. Especially marked improvements were seen in Japan and mainland China, as well as across the eurozone and in the US. Manufacturing employment rose for the second month in a row, although jobs growth remained negligible. Input cost inflation accelerated to a 39-month high, but output prices rose at a slightly reduced pace. Supply chains remained stretched, as signalled by average vendor lead times lengthening for the twenty-first consecutive month.