Manufacturing is improving globally

Sources: Top chart: Bloomberg, IHS Markit, and Wells Fargo Investment Institute, as of September 30, 2021. Bottom chart: World Bank national accounts data and OECD National Accounts data files, as of December 31, 2020. Japan manufacturing as percentage of the economy data as of December 31, 2019. PMI = Purchasing Managers’ Index. GDP = gross domestic product. The PMI is an index developed from monthly business surveys used to monitor the condition of industries and businesses.

Key Takeaways

  • The service industry was affected by the pandemic more than the manufacturing industry was. Support for manufacturing has come from a global shift to goods spending during periodic lockdowns. Added support will continue to come from bringing inventories into alignment with sales as supply-chain disruptions ease.
  • The shift to a more services-oriented economy has left most of the global economy’s key players better-positioned for the reopening led by those same industries hit hardest during the pandemic.