Global manufacturing expansion hits fastest pace since 2022

Rising orders and output lifted factory activity worldwide.

Global manufacturing activity expanded in February at the fastest pace since mid-2022, supported by stronger output and a surge in new orders, according to the latest survey compiled by S&P Global. 

The J.P. Morgan Global Manufacturing Purchasing Managers’ Index (PMI) rose to 51.9 in February from 50.9 in January, marking its highest reading since June 2022 and signalling a solid improvement in business conditions across the sector. A PMI reading above 50 indicates expansion, whilst a figure below that level signals contraction. 

Factory output increased at the fastest rate since late 2021, underpinned by the steepest rise in new orders in four years, reflecting a revival in global trade flows. Export demand also strengthened, with overseas sales expanding at the quickest pace since mid-2021. 

The upturn was particularly evident in Asia, where several economies recorded strong gains in production. Robust manufacturing growth in the region helped lift the ASEAN PMI to a record high, highlighting the region’s increasingly important role in global supply chains. 

However, the survey also pointed to rising cost pressures. Input prices climbed at the sharpest rate since November 2022, driven by higher raw material and labour costs as well as supply bottlenecks. 

Economists warned that geopolitical tensions and higher energy prices could add further strain to supply chains and production costs in the coming months, potentially weighing on the pace of manufacturing growth worldwide.