Key findings

• Manufacturing PMI rises to 50.0 in February
• New order intakes move closer to stabilising
• Input cost inflation eases to 28-month low

The February PMI surveys signalled a return to growth for the global manufacturing sector. Output rose for the first time in seven months amid improving supply chains and China's re-opening as COVID restrictions were lifted. Business optimism also revived, rising to its highest level in a year.

At 50.0 in February, up from 49.1 in January, the J.P.Morgan Global Manufacturing PMI™ – a composite index produced by J.P.Morgan and S&P Global in association with ISM and IFPSM – posted a reading identical to the no-change mark, halting a five-month run of signalling contraction. The PMI level was impacted positively by increased production and employment and slower rates of decline in both new business and stocks of purchases.

Manufacturing output rose for the first time since July 2022, as solid growth in the consumer and investment goods sectors offset the continued downturn at intermediate goods producers.

The upturn in production volumes was led by Asia, with Thailand, India and the Philippines registering the fastest rates of growth. The region also benefited from the ongoing re-opening process in China, where output rose for the first time six months. In contrast, the downturn in Japan extended to an eighth successive month, with the rate of contraction a 31-month record.

The performances of the North America, Europe and South America remained weak (on average) in comparison to Asia. Although the euro area saw output rise for the first time in nine months, the rate of growth was negligible. A steep downturn in France offset growth in nations such as Germany, Italy and Spain. The UK returned to growth, but the Czech Republic and Poland contracted. February saw manufacturing output decline in both the US and Brazil for the fourth month in a row.

Aiding the return to growth for world manufacturing production was an easing of supply-chain constraints.

Average vendor lead times shortened for the first time since July 2019, reflecting an improvement in the intermediate goods industry and near stable times at both consumer and investment goods producers. China, the US and the euro area were among those to see supplier delivery times improve, in contrast to further lengthening in Japan.

The trend in global manufacturing new business moved closed to stabilising in February, as new work intakes fell to the weakest extent during the current eight-month sequence of contraction. The pace of decline in new export orders also eased to an eight-month low.

Manufacturing employment rose for the first time in four months and at the quickest pace since last June. Staffing levels were increased in China, the US, the euro area and Japan (among others). Jobs growth aided companies in achieving both increased output and lower backlogs of work.

Input price inflation eased to a 28-month low in February. Costs nonetheless rose for the thirty-third successive month, with part of the latest increase passed on to clients in the form of higher selling prices.