Global manufacturing PMI rises further in February on China's reopening
The February manufacturing PMIs published last week resulted in the global index showing the second monthly rise in a row, moving back to the neutral 50 mark separating expansion from contraction (January: 49.1). This improvement was led by emerging markets (EMs), particularly China.
Global manufacturing PMI rises back to neutral mark, driven by China
The February manufacturing PMIs published last week resulted in the global index showing the second monthly rise in a row, moving back to the neutral 50 mark separating expansion from contraction (January: 49.1). This improvement was led by emerging markets (EMs), particularly China. The aggregate index for EMs rose to 51.6 (January: 49.9), with Caixin’s index for China, included in the EM aggregate, returning to expansion territory (51.6, versus 49.2 in January). The official index for China, published by NBS, showed a similar improvement, rising from 50.1 to 52.6. This reflects China’s solid rebound, following the rapid Zero-Covid exit initiated last December (also see our recent update on China’s February PMIs ). The picture for other EMs was quite stable in February, although with improvements seen in Taiwan, Brazil, Russia and Mexico as well. Meanwhile, the aggregate index for developed markets (DMs) was stable at 48.1, staying below the neutral mark for the fifth consecutive month, but remaining above the trough seen in December 2022 (47.3). Improvements in the UK and the US were offset by declines in Japan and the eurozone.
Recovery led by the supply side
Looking at the various subcomponents of the global manufacturing PMI, improvements are quite broad-based, but clearly led by the supply side. The global output component rose by almost two points to 50.8 (January: 48.9), driven by EMs/China, while the future output component rose to a one-year high of 62.8 (January: 62.3). On the demand side, the global subindices for new orders and export orders both improved, but remained below the neutral 50 mark (with the picture much better for EMs than for DMs). The global sub-index for delivery times rose by two points to a post GFC-high of 50.9, and is now clearly above pre-pandemic average (2019: 49.5). The global component for input prices dropped further to 55.7 (January: 57.0), the lowest level since October 2020, while the output price component stabilised at 54.8. All of this is also reflected in our global supply bottlenecks index, which fell further into ‘abundant supply territory’.