GLOBAL MACRO: Global Manufacturing PMI Subdued But Trending Higher

With protectionism on the rise with the US Trump administration’s focus on tariffs, global IP and trade trends are likely to be monitored closely. An additional 10% has been added to the 10% for imports from China and 25% for goods from Canada and Mexico are scheduled to be introduced today. The JP Morgan global manufacturing PMI for February held up though and signalled slightly stronger industrial growth with the index rising to 50.6 from 50.1, the highest since June. 

• While the PMI remains around the breakeven 50-mark, which it averaged in 2024, it has trended higher since September. It doesn’t yet seem to be materially impacted by tariff threats and the significant economic uncertainty that has created but export orders remain weak.
• The improvement in the manufacturing PMI was due to stronger output and orders growth but employment continued to contract. The increase in orders was driven by domestic demand as export orders continued to decline although at a slightly slower rate.
• Heightened uncertainty also didn’t dampen confidence in the outlook with it rising to its highest in 9 months.
• The price/cost components showed a pickup in cost and selling price inflation, which may concern central banks.
• Global IP growth remains subdued but has been improving with it up 0.8% m/m in December, its ninth consecutive non-negative outcome. It rose 2.6% y/y, strongest since October 2022, while 3-month momentum is its highest in almost three years. Global trade volume growth has also been trending higher. 

Global growth