Global PMI Analysis: Manufacturing Recovery Gains Momentum

The latest Purchasing Managers' Index (PMI) data for July 2025 reveals a synchronized global manufacturing recovery gaining momentum after months of contraction. The Global Manufacturing PMI rose to 51.8, the highest reading in 18 months and firmly above the 50-point expansion threshold. Developed markets led the improvement with the US ISM Manufacturing Index climbing to 52.3, driven by new orders (54.1) and production (53.5) components. Europe showed marked improvement with the Eurozone manufacturing PMI at 50.8, the first expansionary reading since March 2024. Germany, the region's manufacturing powerhouse, returned to growth at 51.2, supported by improving automotive and machinery sectors. Asia-Pacific presented a mixed picture with China's Caixin PMI at 51.5, indicating private sector expansion despite official PMI at 49.8. Japan's PMI strengthened to 52.7, benefiting from weak yen competitiveness and robust export orders. India continued outperformance at 57.5, driven by domestic demand and infrastructure investment. Supply chain pressures eased further with delivery times normalizing and input cost inflation moderating. However, employment components remained weak across regions, suggesting cautious hiring. Inventory levels are rebuilding after extended destocking, supporting production outlook. New export orders improved to 50.3 globally, signaling stabilizing trade despite ongoing geopolitical tensions. The report notes that while the recovery appears broad-based, its sustainability depends on final demand strength and monetary policy trajectories. Risks include energy price volatility and potential trade disruptions.