A Mixed Performance for Manufacturing in February

In February, manufacturing PMI results are mixed with 7 out of 17 reporters showing results that are worse than they were one month ago. Over three months nine countries or regions show worse PMI values than they had six months ago; there is net deterioration over six months. However, over 12 months all reporting areas except one show results superior to what it was 12-months ago with the exception being China.

The table shows mixed momentum over three months and six months. But the queue or rank standings show that by and large conditions are still relatively firm across most of the regions for manufacturing. Only three countries have percentile standings of their PMI gauges below 50%; those are Mexico, China, and Russia. Turkey sits on the fence at its 50% mark. Queue and rank standings at 50% reflect the midpoint for each series. For the most part, countries have firm-to-strong readings for manufacturing well above their midpoints. These results are quite solid when compared to their recent history over the last four-plus years.

The table also shows changes in manufacturing PMIs since January 2020 before the virus struck. What we see is only the euro area and Germany have double-digit improvements over this period. After that, the biggest improvement that we see comes from the U.K. at eight points and then a number of countries in the five-to-six-point gain region such as France, the U.S. and Canada. Showing weakness over this period; i.e., a decline -a weaker PMI gauge in February 2022 than in January 2020- are Mexico, China, Russia, India, and Turkey. That weakness indicates that there is still a significant risk in countries that have had no improvement in manufacturing PMIs in over two years and in countries where PMI stands are still low.

The second table is meant to show some of the distribution beyond simply ranking values across the various contributing countries. It reflects the concentration of standings in the PMI range not according to ranking values- a very different concept. 17 countries have manufacturing sectors represented in Table 1 and in Table 2. For the most part, observations tend to cluster in the 50 to 55 range of PMI values. That range represents moderate expansion -normal expansion- in most cases. Values at 50 show stagnation and value close to 50 show a bare bones expansion. Values around 55 are a lot closer to a normal slightly elevated expansion for many of them. Values below 50 indicate contraction in manufacturing.

In February, we see nearly 53% report PMI values in the 50 to 55 range; that's up from 38.9% in January and from 44.4% in December and it's better than what we've seen over three months, six months and 12 months as well; there are more countries that are operating in the normalcy range. However, there are fewer countries operating in the elevated range of 55 to 60. That percentage is down to 35.3% in February from 44.4% in January and 44.4% in December although it's slightly stronger than over 12 months. Operating at a subnormal level in the 40% to 50% cohort are 11.8% of the values in February. That's down from 16.7% in January but about the same as in December and at a lower proportion than we generally see over three months, six months and 12 months. It is also historically low. What we're seeing in the data from February, is more of coalescing of manufacturing sectors in the normal region. Countries are migrating out of the strong range moving to the middle as well as migrating out of the weak range into a range in the middle of normalcy.