Economy in Brief: March 2023

S&P manufacturing PMIs for February show a much more mixed bag than in previous months. Of the 18 reporting entities in February, 11 improve month to month. So, on a country count, there are more improvements than deteriorations. However, looking at the median level month-to-month, it is still lingering below ‘50’ indicating contraction in the lexicon of diffusion indexes - even though the median value does improve slightly month-to-month. As I noted, a mixed bag.

Sequential data also show complicated trends. The average PMI for manufacturing over three months is slightly better than over six months but only by a tick comparing 48.5 to 48.4. That's still showing a sector decline in terms of PMI diffusion index values. Over six months only 5 reporters show improvement compared to 12-month values. There is net deterioration over 12 months where there are only 5 reporters out of 18 that improve compared to 12-months ago.

Despite the slight firming on the month, there is continued contraction in manufacturing being reported although the contraction being reported is quite small. Still, the median queue standing that evaluates the current month has a standing compared to where it's been since 2019 at its 37th percentile. On that timeline back to January 2019, only six of 18 entries show percentile standings above their historic medians. On that span, the median is marked by a 50-percentile standing. Oddly - and interestingly- China and Russia both claim 98 percentile standings on the period, the highest in the group. Part of that is a reflection of how weak they have been.

The changes since COVID arrived, back to January 2020 levels, show there are eight reporting regions that have current manufacturing PMI values above their January 2020 levels: that’s over a span of three years. There's been very little growth overall as the median change has been a decline of 0.2 in the median PMI index.

Asian reporters in the table have fared better than the whole group overall. They log an average PMI value of 50 in February and sequential averages from 12-months, to six-months, to three-months show a progression higher. Their percentile standing at the 48th percentile is higher than the median for the group. China’s improvement and exit from a zero Covid strategy is helping.