Theme of the Day: Global manufacturing resilience tested amid rising input costs and supply chain disruptions

Key findings: Slower growth of output and new orders. Input price inflation at 44-month high. Business confidence at five-month low. The outbreak of war in the Middle East tested the resilience of the global manufacturing sector at the end of the opening quarter of 2026. Growth of output and new orders slowed as global trade flows near-stagnated, while input costs surged and supply chains became increasingly stretched. The J.P. Morgan Global Manufacturing PMI index posted 51.3 in Mar, down from Feb's 44-month high of 51.8, but still the second-highest reading since Jun 2022. The PMI has remained above its neutral 50.0 mark for eight successive months. Three of the PMI components - new orders, output and suppliers' delivery times - remained at levels normally consistent with an improvement in operating conditions, while employment and stocks of purchases were neutral. Growth of manufacturing production eased to a three-month low in Mar. Output growth slowed across the consumer, intermediate and investment goods sub-sectors. Growth of manufacturing production eased to a three-month low in March. Output growth slowed across the consumer, intermediate and investment goods sub-sectors. Of the 33 nations for which Mar data were available, 12 saw outright contractions of production volumes (Australia, Brazil, Canada, France, Indonesia, Kazakhstan, Mexico, Romania, Russia, Spain, Turkiye and the UK), while 19 registered a lower PMI Output Index reading than in February. The steepest downturns were seen in Kazakhstan, Romania, Mexico, Russia and Turkey. When compared to Feb Output Index readings, performances worsened to the greatest extents in Indonesia, Vietnam, India and the Philippines. The four largest industrial regions (mainland China, the US, the euro area and Japan) saw output continue to rise in Mar. The US and eurozone bucked the global trend by seeing mild growth accelerations. China and Japan saw rates of output expansion ease from Feb's recent highs. Business confidence about the outlook for the year ahead slipped to a five-month low amid rising cost pressures and greater stresses on supply chains. Input price inflation accelerated to its highest level since Jul 2022, while suppliers' lead times lengthened to the greatest extent in almost three-and-a-half years. Mar saw a modest deceleration in the rate of increase in new order intakes, reflecting slower demand growth in a number of domestic markets and also a near-stagnation in the volume of international goods trade. Levels of global manufacturing employment and stocks of purchases were meanwhile unchanged compared to the prior survey month. Job cuts registered in the euro area and the UK (among others) offset increased staffing levels in nations such as mainland China, Japan and India. Manufacturing jobs in the US registered little change compared with Feb. The outbreak of war in the Middle East played a key role in the intensification of price and supply pressures faced by global manufacturing firms during Mar. In fact, reports of higher prices were around two-and-a-half times the normal level, led by Semiconductors, but there were also steep increases signalled in Electrical Items, Transport, Energy and Oil. All monitored commodities registered price increases at the end of the first quarter, with 22 of the 26 seeing reported price pressures above the long-run trend. Concurrently, pressure on supply chains was apparent in Mar, with reported supplier shortfalls exceeding the long-run average for the first time since Jun 2023. Just over half of the monitored commodities recorded above-average shortages, with the most severe reports seen for Oil. At four-and-a-half times the usual level, reported shortfalls of Oil were the highest recorded since the start of 2023. The wider impact of the conflict will be seen in the coming months, but it is clear the resilience of the global manufacturing sector will likely be tested.