The global manufacturing sector expanded for the second consecutive month in February, driven by stronger output and new orders, though rising input costs and selling prices added to inflationary pressures.
According to JP Morgan, the JP Morgan Global Manufacturing PMI, compiled in collaboration with S&P Global Market Intelligence, ISM, and IFPSM, reached an eight-month high of 50.6, up from 50.1 in January.
This increase signals a gradual recovery in the sector, despite ongoing challenges, JP Morgan said in a media release.
Manufacturing output saw its fastest expansion in eight months, with growth recorded in the consumer and intermediate goods industries.
Investment goods production, which had faced an eight-month downturn, stabilised. The increase in output was largely attributed to a rise in new business, with new orders growing at the quickest pace since March 2022.
While international trade volumes remained in decline for a ninth straight month, the rate of contraction was mild and the slowest within that period.
Regionally, India, Indonesia, Brazil, and the United States reported the highest PMI readings in February, reflecting robust activity.
The China PMI showed signs of improvement, whereas contractions were noted in the euro area, Japan, and the United Kingdom.
Employment in the global manufacturing sector, however, continued to shrink for the seventh month in a row, with job losses in China, the euro area, the UK, Canada, and Mexico.
These declines were only partially offset by employment gains in the US, Japan, Brazil, and India.
Business optimism strengthened, with confidence levels reaching a nine-month high, particularly in the intermediate and investment goods sectors.
The new orders-to-stocks of finished goods ratio, a key indicator of future production trends, climbed to its highest level in nearly three years.
Despite the overall expansion, inflationary pressures persisted. Input costs and selling prices increased at the fastest rates in 25 and eight months, respectively.
Two of the three sub-sectors covered in the survey saw price increases, with intermediate goods experiencing the most significant inflationary pressures, while consumer goods recorded the weakest.
The data for February was slightly affected by later-than-usual release dates, which resulted in the exclusion of readings from Greece, Pakistan, and South Korea.
Additionally, revisions were made to global numbers from May 2024 onwards following the incorporation of the Pakistan Manufacturing PMI time series.
