Despite a 20-month streak of growth for the overall economy, ISM’s^® January Report On Business^® showed a 1.2 percent drop to a PMI of 57.6 percent for US manufacturers. While still in positive territory, the figure was the second straight month to register a decline and it also represented the lowest mark since November 2020.

“Manufacturing performed well for the 20th straight month, with demand and consumption registering month-over-month growth,” says Timothy R. Fiore, Chair of the ISM^® Manufacturing Business Survey Committee. “Meeting demand remains a challenge, due to hiring difficulties and labor turnover at all tiers. For the third month in a row, Business Survey Committee panelists’ comments suggest month-over-month improvement on hiring, offset by backfilling required to address employee turnover at a higher rate, supplier performance and improvements in the transportation sector.”

With many regions experiencing supply chain issues and labor shortages, most of the global manufacturing countries tracked by Brushware saw a decline in PMI readings for August compared to July. Italy was the only country that showed an improved PMI reading. Despite the challenges, business optimism remained strong across most of the regions and countries tracked.

GERMANY: IHS Markit/BME reported a 62.6 percent August PMI for German manufacturers for a 3.3 percent drop from the previous month. Supply shortages caused output to significantly fall behind new orders. Increasing price pressure reduced business optimism, but employment rose for a sixth straight month as manufacturers looked to expand capacity. 

Global manufacturers saw varying results in the month of July as many countries face new headwinds with COVID-19 outbreaks hitting specific regions. Additionally, lead times are still extended with supply chain issues continuing. Firms are also facing labor challenges that pre-date the pandemic but have escalated during the past 18 months. Both issues lead to inflationary pressure with most regions reporting input and output price increases. Still, all countries in our report remain above the crucial 50 percent PMI line, but business confidence overall for manufacturers is slipping as companies weigh the impact of prolonged issues from the COVID-19 Delta variant.

GERMANY: IHS Markit/BME reported a PMI of 65.9 percent for German manufacturers in July, which represented a second straight month of growth and the third-highest figure on record. New orders were strong and led to a sharp increase in backlogs. Employment also saw a big increase.