Strong global manufacturing activity, particularly in southeast Asia and Europe, points to near-term opportunities and strong investment demand in Q1 2022, which B2B firms should position themselves to take advantage of. However, firms should anticipate rising input costs, supply shortages, and virus-related disruptions to persist for at least the next several months.


Across markets, global manufacturing activity remains strong despite widespread challenges with delivery delays, surging prices, and labor shortages. Manufacturing Purchasing Managers’ Indexes (PMIs) point to the near-term direction of economic trends in the manufacturing sector based on surveys of purchasing managers. In November, PMIs for almost all markets were above 50, signaling an expansion in manufacturing activity. The exceptions are Brazil, Mexico, Egypt, Lebanon, China, and Kazakhstan, whose PMIs point to a near-term contraction in manufacturing. Although Mexico’s manufacturing outlook is improving, Brazil, China, and Egypt are facing downturns due to weak demand and continued supply shortages. Lebanon’s manufacturing sector continues to contract amid ongoing currency depreciation and an economic crisis.

recent manufacturing trends, by country (global manufacturing activity)

Our View

Analysis of PMI trends reveals a couple of key themes. Manufacturing output across nearly all markets is being held back by shortages, surging input costs, delivery delays, and—in some markets—difficulty finding workers. Despite these hurdles, global demand for manufactured goods remains exceptionally strong. That has helped southeast Asia’s manufacturing sector bounce back quickly after lockdowns and virus-related disruptions in the third quarter of 2021. Although the region’s manufacturing sector remains vulnerable to future virus-related disruptions, strong order volumes and fast-expanding employment point to near-term opportunities. Manufacturing demand is likewise exceptionally strong in Europe, but growth has slowed recently because of high energy and input costs. Those issues are most acute in Germany and Central Europe, where the auto sector has been hit hard by the global semiconductor shortage. Strong global demand for durable and non-durable goods is expected to continue, but output will likely be curtailed by supply chain issues and virus-related disruptions well into next year.

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