Graph showing the manufacturing PMI level and trend for various areas as of March 31, 2024. Levels below 50 indicate contraction and above 50 indicate expansion. The eurozone manufacturing PMI was up to 46.1. The U.S. manufacturing PMI was up to 50.3. The global manufacturing PMI was up to 50.6. The Japanese manufacturing PMI was up to 48.2. The Chinese manufacturing PMI was up to 51.1.
Line chart showing the global supply chain pressure from September 1997 to March 2024. There had not been any sustained pressures until 2020. Supply chain pressures spiked with the pandemic, fell until the end of 2020, then rose again peaking in late 2021. Pressures have declined as deliveries normalized. In recent months, pressures have increased but remain within the normal, pre-pandemic range.
Sources: Top chart: Bloomberg, IHS Markit, and Wells Fargo Investment Institute, as of March 31, 2024. Bottom chart: Bloomberg and Wells Fargo Investment Institute. Monthly data from September 1, 1997, to March 31, 2024. PMI = Purchasing Managers’ Index. The PMI is an index developed from monthly business surveys used to monitor the condition of industries and businesses. The Global Supply Chain Pressures Index is normalized so a zero indicates the index is at its average value with positive values representing supply chain tightening.
Key Takeaways
- Manufacturing activity in most major developed economies has improved but remains in or near a recession, as spending rotates from goods to services and pressures household finances.
- Supply chains have largely recovered, signaling a rebalancing of the structural imbalance from post-pandemic supply constraints. More measured increases in supply, plus possible central-bank easing, leave the economy more exposed to firmer inflation as it emerges from our expected growth slowdown later this year.