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US inflation and UK GDP under spotlight amid Middle East war assessment

The markets will be focused on events in the Middle East but have key inflation releases out of the US to divert attention, as well as UK GDP, eurozone production and mainland China's inflation numbers to watch out for.

The developing situation in the Middle East will inevitably dominate the markets in the coming week, and in particular any signs of the war becoming protracted. While a short-term spike in energy prices is unwelcome, it is not the game changer that a longer bout of elevated oil and gas prices potentially represents in terms of economic growth and inflation forecasting. S&P Global Connect users can access our regular updates via the MENA regional conflict pages.

A source of encouragement was that, prior to the outbreak of war, the global economy was showing signs of renewed life, which could add to resilience in the face of the Middle East crisis, especially if the war is short-lived. The global PMI's output index hit one of its highest readings since the pandemic in February, signaling an upturn in global GDP growth to an annualized 3.0% rate.

We need to wait until 24th March for the first real signs of economic health since the war started via the March flash PMIs, but the week still provides some important economic releases. In particular, the US inflation picture will be updated through both the CPI and the Fed's preferred PCE price index. More details on US economic growth will also be provided through the second estimate of Q4 GDP, with prior estimates having disappointed. Some clues as to how US households are feeling will also be gleaned from the University of Michigan survey.

In Europe, monthly GDP data are issued in the UK, and we will be looking for signs that growth has started to pick up following encouraging signals from PMI surveys. The UK labour market is also under scrutiny from the REC/KPMG recruitment industry survey. Elsewhere in Europe, a key release is industrial production data for the eurozone, including for Germany, which PMI data have indicated to be reviving at a pace not seen for nearly four years.

In APAC, China's ongoing National People's Congress is accompanied by consumer and producer price updates, while GDP data are issued for both Japan and South Korea.

Also watch out for the PMI-based Global Business Outlook survey, released Wednesday, and the S&P Global Investment Manager Index for March, released Tuesday.

Chart of the week: Global economic growth accelerated in February

The global PMI hit its highest levels since May 2024, and one of the best readings seen since the pandemic, in February, indicating that global economic growth had more or less returned to its long-run trend rate ahead of the US-Israeli attacks on Iran. This points to promising signs of life given the uncertainty that was already simmering around US tariffs and the Middle East situation through February, but March surveys will be eagerly assessed to see whether growth has faltered in the face of the ongoing crisis.

Read more about recent global PMI trends here.

Key diary events

Monday 9 Mar

Americas
- Mexico Inflation (Feb)
- US Consumer Inflation Expectations (Feb)

EMEA
- Germany Industrial Production (Jan)
- UK KPMG / REC Report on Jobs* (Feb)

APAC
- China (Mainland) CPI, PPI (Feb)
- Taiwan Balance of Trade (Feb)
- China (Mainland) National People's Congress (Mar 5-13)

Tuesday 10 Mar

S&P Global Investment Manager Index* (Feb)

Americas
- Mexico Consumer Confidence (Feb)
- US ADP Weekly Employment Change
- US Existing Home Sales (Feb)

EMEA
- Germany Balance of Trade (Jan)
- Sweden GDP (Jan)
- Türkiye Industrial Production (Jan)
- France Balance of Trade (Jan)

APAC
- South Korea GDP (Q4, final)
- Australia Westpac Consumer Confidence Change (Mar)
- Japan Household Spending (Jan)
- Japan GDP (Q4, final)
- Australia NAB Business Confidence (Feb)
- China (Mainland) Balance of Trade (Jan-Feb)

Wednesday 11 Mar

Global Business Outlook* (Feb)

Global Supply Chain Volatility Index* (Feb)

Americas
- Brazil Retail Sales
- US CPI (Feb)

EMEA
- Germany Inflation (Feb, final)
- Türkiye Retail Sales (Jan)
- Spain Retail Sales (Jan)

APAC
- Japan PPI (Feb)
- Malaysia Unemployment Rate (Jan)
- Japan Machine Tool Orders (Feb)

Thursday 12 Mar

Americas
- Brazil Inflation (Feb)
- Canada Balance of Trade (Jan)
- US Building Permits (Jan, prelim)
- US Housing Starts (Jan)
- US Balance of Trade (Jan)

EMEA
- UK RICS House Price Balance (Feb)
- Sweden Inflation (Feb, final)
- Türkiye TCMB Interest Rate Decision

APAC
- India Inflation (Feb)

Friday 13 Mar

Americas
- Mexico Industrial Production (Jan)
- Canada Unemployment Rate (Feb)
- US Core PCE Price Index (Jan)
- US GDP (Q4, 2nd est.)
- US Personal Income and Spending (Jan)
- US Durable Goods Orders (Jan)
- US JOLTs Job Openings (Jan)
- US UoM Sentiment (Mar, prelim)

EMEA
- Germany Wholesale Prices (Feb)
- UK monthly GDP, incl. Manufacturing, Services and Construction Output (Jan)
- Italy Industrial Production (Jan)
- Eurozone Industrial Production (Jan)

APAC
- Hong Kong SAR Industrial Production (Q4)

Saturday 14 Mar

APAC
- China (Mainland) M2, New Yuan Loans, Loan Growth (Feb)

* Access press releases of indices produced by S&P Global and relevant sponsors here.

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Renewal of trade growth across both manufacturing and service sectors

The seasonally adjusted PMI New Export Orders Index for the manufacturing sector rose to the joint-highest since July 2021 (matched also by November 2021), simultaneously indicating the first expansion in global goods export orders in nearly a year. This improvement in goods trade unfolded against a backdrop of booming manufacturing sector conditions as the headline global manufacturing PMI climbed to a near four-year high in February. Manufacturing output growth was notably stronger in Asia, particularly in ASEAN, and in Europe, but softened in North America partly due to extreme weather. Similarly for new export orders, the Asia-Pacific region saw goods exports expand at the quickest rate since mid-2010 just as the decline in Europe eased to a marginal level while North America's contraction deepened.

The latest acceleration in manufacturing sector activity growth was accompanied by improvements in sentiment among goods producers, though we must highlight that the data were collected ahead of the latest escalation of conflict in the Middle East and absent any impact from the US Supreme Court decision on tariffs. Overall optimism among manufacturers was at the highest since mid-2024, reflecting a positive attitude towards further expansions in output just prior to the unfolding of the war in the Middle East. As such, the latest data revealed that global trade was resilient in February, though upcoming March data will offer better insights into changes in demand, price and sentiment conditions following the unfolding of these key events at the end of February.

Services exports meanwhile expanded globally for the first time in three months. Although marginal, the rate of growth was the quickest since November 2024. Similar to the manufacturing sector trend, services activity rose at a solid pace that was the fastest in four months, driven by stronger demand compared to the start of the year.

Detailed sector PMI revealed that manufacturing sectors took over the lead for global export growth midway through the first quarter. The best performers were the Beverage & Food and Technology Equipment sectors, followed by Banks. Automobile & Auto Parts was also notably in the top five. On the other hand, Tourism & Recreation, Forestry & Paper Products and Other (non-bank) Financials ranked last.

Emerging market new export business rises solidly while developed economies near-stabilises

Emerging markets were the main engine behind the latest acceleration in global new export orders growth. Expanding for a second successive month, the rate at which new business increased was the fastest since August 2017. This was attributed to improvements in both the manufacturing and service sectors, with the former leading growth at a solid pace.

In contrast, developed markets again reported lower new export business in February, though the rate of decline was only marginal. The reduction in new export orders remained broad-based, albeit with goods new export orders falling only fractionally and the rate of services contraction easing to the least pronounced pace in nearly a year.

Number of top ten trading economies in expansion remains at five

By countries, the number of top ten trading economies recording higher goods exports remained at five in February, unchanged from those reporting improved trade at the start of 2026, again dominated by APAC economies. Notably, mainland China took over in first place, displacing India from the lead for the first time in 16 months. Mainland China's goods export orders rose at the most pronounced pace since September 2020, which helped to support the strongest improvement in manufacturing sector conditions in over five years. Japan also saw a charge-up of its export growth momentum citing improved demand from Europe and other Asian economies.

In contrast, India's manufacturing new export orders rose at the slowest pace in 17 months, though overall growth remained supported by stronger domestic demand in February. Export gains were also reported in South Korea and the UK.

On the other hand, America economies - Brazil, Canada and the US - were the weakest performers in February, with tariffs continuing to impact goods trade and production to varying degrees. Marginal reductions in goods export orders were meanwhile also observed for Russia and the EU.

Access the global press release here.

Jingyi Pan, Economics Associate Director, S&P Global Market Intelligence

jingyi.pan@spglobal.com

]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/fastest-rise-in-global-export-orders-in-over-four-years-Mar26.html~/marketintelligence/en/mi/research-analysis/fastest-rise-in-global-export-orders-in-over-four-years-Mar26.htmlJingyi Pan PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/fastest-rise-in-global-export-orders-in-over-four-years-Mar26.htmlWed, 04 Mar 2026 06:11:46Global manufacturing input costs rose in February at the sharpest rate since 2022 as supply chain bottlenecks added to upward pressure on prices from higher labour costs and US tariffs. Higher energy prices and further supply disruptions from the Iran war look likely to add further pressure to producer price inflation in March.

Manufacturing prices rise at fastest rate since 2022

Global manufacturing input prices rose in February at the sharpest rate since November 2022, according to PMI data sponsored by J.P. Morgan and compiled by S&P Global Market Intelligence.

The global manufacturing PMI input prices index, for which any reading above 50 signals an increase in prices on the prior month, rose from 56.4 in January to 57.3, indicating an acceleration of worldwide factory input cost inflation for a fourth successive month.

Only two economies - Thailand and the Philippines - reported lower factory input costs in February, while the largest increase by far was reported in Taiwan, linked by many purchasing managers to demand exceeding supply, causing a lengthening of supplier lead times.

Prices in mainland China rose at the sharpest rate since June 2022, contributing to the steepest rise in pan-Asia prices since October 2022. Eurozone input cost inflation hit the highest since December 2022 and US prices also continued to rise sharply, albeit the rate of increase down from 2025 highs, often blamed on tariffs.

Supply delays

The rise in global prices also coincided with a lengthening of suppliers' delivery times worldwide to one of the greatest extents since the pandemic-related supply constraints of 2022.

Only three economies - India, mainland China and Italy - reported faster delivery times in February. The longest/most widespread delays were seen in Myanmar and Australia. However, delays across Asia excluding mainland China have risen to the highest since January 2023, and recent months have seen delays in Europe extending out to their greatest since 2022. While US delays were also the most pronounced since 2022, this was in part due to adverse weather.

Price impact outlook to depend on duration of MENA conflict

While supplier delivery times have lengthened, the overall incidence of delays remains far lower than seen during the COVID-19 shutdowns. However, the PMI data for February were collected prior to the US-Israeli attacks on Iran and the ensuing escalation of conflict in the Middle East.

Since the attacks, energy prices have risen sharply and supply chains have been disrupted, notably via concerns over attacks on shipping through the Strait of Hormuz. We note that, according to comments from PMI contributors in the February survey, the rise in manufacturing costs was neither a reflection of energy prices nor shipping costs, suggesting these factors could add to inflation pressures in the March survey, exacerbating the existing price drivers of rising labour costs and a broader rise in raw material prices.

For example, as the war moved into its third day, our shipping experts report that about 10% of the global container shipping fleet was either stranded inside the Persian Gulf or held up outside.

Oil prices are meanwhile up one-third on the start of the year at the time of writing, while liquid natural gas prices have risen 50% due to the crisis.

Much of the price and supply impact will clearly depend on the duration of any conflict in the Middle East, and S&P Global Connect users can also access our regular updates on the situation from our risk experts via the MENA regional conflict pages.

The extent to which the conflict is causing supply-driven price rises can be meanwhile tracked through the PMI supplier's delivery times index and price gauges, as well as through the PMI Comment Tracker database, which are updated monthly.

Read more about how to interpret the PMI Suppliers' Delivery Times Index here.

Access the latest global PMI press release here.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/global-manufacturing-input-prices-rise-at-fastest-rate-since-2022-Mar26.html~/marketintelligence/en/mi/research-analysis/global-manufacturing-input-prices-rise-at-fastest-rate-since-2022-Mar26.htmlChris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/global-manufacturing-input-prices-rise-at-fastest-rate-since-2022-Mar26.htmlFri, 27 Feb 2026 12:48:20The following is an extract from S&P Global Market Intelligence's latest Week Ahead Economic Preview. For the full report, please click on the 'Download Full Report' link.

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Global PMI surveys and US payrolls dominate the week ahead

The week ahead sees PMI data for manufacturing and services released around the world, providing a prelude to the publication of the monthly US employment report on Friday. Other key releases include flash inflation numbers in the eurozone, GDP for Brazil, Australia, Italy and the eurozone, plus US trade data.

The full complement of worldwide manufacturing and services PMIs will provide updates on economic conditions in February. January's data showed global growth accelerated from December's six-month low but remained subdued compared to the highs seen last year amid low business confidence. The preliminary flash PMI data available so far have meanwhile painted a mixed picture for February: stronger growth in Japan and the UK, as well as signs of life in the eurozone, contrasted with slower US growth. Although the latter saw economic activity disrupted by weather, the PMIs have signalled a diverging trend of stronger growth in Europe and Asia versus slower US growth for several months now. Asian PMI data will also be important to watch to assess whether the ASEAN economies are continuing to outperform in terms of manufacturing growth.

The national PMI surveys are accompanied by sector PMI data, which will provide insights into detailed industry trends. Here we have seen financial services slip from being a major economic growth driver in 2025 to show signs of a marked weakening of its contribution to global growth.

A lesser-known PMI dataset to also watch is the Comment Trackers, which use the anecdotal evidence provided by PMI survey participants to provide insights into what's driving change in the business environment. The comment-based uncertainty indicator, for example, has fallen in recent months but remains elevated (see chart). While February's PMI data will have been mainly collected prior to recent tariff developments post the Supreme Court ruling, it's possible that we could see uncertainty rise further, especially given events in the Middle East, which could dampen economic activity in the coming months. Tensions around Iran will also be key to oil prices and broader inflation trends, which have shown signs of lifting higher in the flash PMI data.

Friday meanwhile sees the publication of US non-farm payrolls and unemployment data. January's payroll count surprised to the upside at 130K, its highest for just over a year, while unemployment ticked lower to 4.3%. The data caused a pull-back in US rate cut expectations, adding to the prevailing view that the FOMC will remain on hold in the next few months while it weighs the influx of new data.

Read more about recent global PMI trends here.

Key diary events

Monday 2 Mar

Americas
- Mexico Business Confidence (Feb)
- US ISM Manufacturing PMI (Feb)

EMEA
- Germany Retail Sales (Jan)
- Switzerland Retail Sales (Jan)
- Italy GDP (2025)
- UK Mortgage Lending and Approval (Jan)

APAC
South Korea Market Holiday
- Indonesia Inflation (Feb)
- Indonesia Balance of Trade (Jan)
- India Industrial Production (Jan)
- Singapore SIPMM Manufacturing PMI (Feb)

Tuesday 3 Mar

Americas
- Brazil GDP (Q4)

EMEA
- Türkiye Inflation (Feb)
- Spain Unemployment Change (Feb)
- Eurozone Inflation (Feb, flash)
- Italy Inflation (Feb, flash)

APAC
India, Thailand Market Holiday
- South Korea S&P Global Manufacturing PMI* (Feb)
- ASEAN S&P Global Manufacturing PMI* (Feb)
- Japan Unemployment Rate (Jan)
- Australia Building Permits (Jan, prelim)

Wednesday 4 Mar

Worldwide Manufacturing PMIs, incl. global PMI* (Feb)
(Data released from 2 Mar)

Americas
- US ADP Employment Change (Feb)
- US ISM Services PMI (Feb)

EMEA
- Switzerland Inflation (Feb)
- Italy Unemployment (Jan)
- Eurozone Unemployment (Jan)
- Italy GDP (Q4, final)

APAC
- Australia AiG Industry Index (Feb)
- South Korea Industrial Production (Jan)
- Australia GDP (Q4)
- China (Mainland) NBS PMI (Feb)
- Japan Consumer Confidence (Feb)
- Taiwan Export Orders (Jan)

Thursday 5 Mar

Worldwide Services, Composite PMIs, inc. global PMI* (Feb)
(Data released from 4 Mar)

Global Sector PMI* (Feb)

Americas
- US Export and Import Prices (Jan)
- US Balance of Trade (Jan)

EMEA
- France Industrial Production (Jan)
- Switzerland Unemployment Rate (Feb)
- Eurozone HCOB Construction PMI* (Feb)
- Italy Retail Sales (Jan)
- UK S&P Global Construction PMI* (Feb)
- Eurozone Retail Sales (Jan)

APAC
- Australia Balance of Trade (Jan)
- Philippines Inflation (Feb)
- Thailand Inflation (Feb)
- Singapore Retail Sales (Jan)
- Malaysia BNM Interest Rate Decision
- Taiwan Industrial Production, Retail Sales (Jan)

Friday 6 Mar

Americas
- Brazil Balance of Trade (Feb)
- US Non-Farm Payrolls, Unemployment Rate, Average Hourly Earnings (Feb)

EMEA
- Germany Factory Orders (Jan)
- UK Halifax House Price Index* (Feb)
- Eurozone GDP (Q4, 3rd est.)

APAC
- South Korea Inflation (Feb)
- Philippines Industrial Production (Jan)
- Taiwan Inflation (Feb)

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]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-2-march-2026.html~/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-2-march-2026.htmlJingyi Pan | Chris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-2-march-2026.htmlMon, 23 Feb 2026 06:32:30The following is an extract from S&P Global Market Intelligence's latest Week Ahead Economic Preview. For the full report, please click on the 'Download Full Report' link.

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Inflation data to help guide policy trends in the US, Europe and Australia

Upcoming data will help guide markets on central bank policy, and in particular whether Japan and Australia might soon see further rate hikes.

Fresh clues will be sought as to changing economic dynamics after the February flash PMI surveys showed growth slowing in the US but accelerating across the other major developed economies. Although adverse weather in some states likely played a role, US business activity growth slipped to a ten-month low in February. Japan's expansion meanwhile hit a 33-month high and UK growth climbed to the fastest in 22-months. This means that, so far this year, the US expansion is now lagging that of the UK and Japan and drawing closer to the lacklustre pace seen in the eurozone, albeit the latter picking up some momentum to draw a further contrast with the US.

The US flash PMI also once again saw above average price growth, helping in part explain some of the spending aversion evident in the US PMI data, with many firms continuing to blame tariffs and affordability issues for order book malaise, especially in terms of exports.

Hence, we will be awaiting producer price data alongside factory orders and consumer confidence for the US to gain further insights into economic growth and inflation trajectories. Likewise in Europe, fourth quarter GDP data for Germany and France are accompanied by preliminary February CPI inflation readings for France, Germany and Spain.

Consumer confidence statistics for Europe will also help shed light on whether lower interest rates in the UK and eurozone are benefitting households.

In APAC, industrial production data out of Japan and CPI inflation for Australia will be important to assess for policy implications. The Bank of Japan is poised to tighten policy further in the coming months after raising interest rates to a 30-year high back in December, as is the Reserve Bank of Australia, which hiked rates for the first time since 2023 in February and warned of more hikes to come if inflation proved worrying in the first quarter.

Fourth quarter GDP data are also released for India, which has been a sustained strong performer in the PMI rankings globally, albeit losing a little momentum at the tail end of 2025, as well as Singapore and Hong Kong SAR. Interest rate decisions are meanwhile due for Thailand and South Korea.

Read more about recent global PMI trends here.

Key diary events

Monday 23 Feb

Americas
- Mexico GDP (Q4, final)
- US Chicago Fed National Activity Index (Jan)
- US Factory Orders (Dec)
- US Dallas Fed Manufacturing Index (Feb)

EMEA
- Germany Ifo Business Climate (Feb)
- Italy Inflation (Jan, final)

APAC
China (Mainland), Japan Market Holiday
- New Zealand Retail Sales (Q4)
- Singapore Inflation (Jan)

Tuesday 24 Feb

Americas
- US ADP Weekly Employment Change
- US S&P/Case-Shiller Home Price (Dec)
- US Conference Board Consumer Confidence (Feb)
- US Wholesale Inventories (Dec)

EMEA
- France Business Confidence (Feb)

APAC
- South Korea Consumer Confidence (Feb)
- China (Mainland) Loan Prime Rate (Feb)

Wednesday 25 Feb

Americas
- Canada Manufacturing Sales (Jan, prelim)

EMEA
- Austria Manufacturing PMI* (Feb)
- Germany GfK Consumer Confidence (Mar)
- Germany GDP (Q4, final)
- Eurozone CPI (Jan, final)

APAC
- South Korea Business Confidence (Feb)
- Singapore GDP (Q4, final)
- Australia Inflation (Jan)
- Thailand Trade (Jan)
- Bank of Thailand Interest Rate Decision
- Hong Kong SAR Inflation (Jan)

Thursday 26 Feb

Americas
- Mexico Unemployment Rate (Jan)
- Canada Current Account (Q4)
- US Initial Jobless Claims

EMEA
- Türkiye Trade (Jan)
- Italy Business Confidence (Feb)
- Eurozone Economic Sentiment (Feb)
- Spain Business Confidence (Feb)

APAC
- New Zealand ANZ Business Confidence (Feb)
- South Korea BoK Interest Rate Decision
- Japan Housing Starts (Jan)
- Singapore Industrial Production (Jan)
- Hong Kong SAR GDP (Q4, final)

Friday 27 Feb

Americas
- Brazil Unemployment Rate (Jan)
- Mexico Balance of Trade (Jan)
- Canada GDP (Q4)
- US PPI (Jan)
- US Chicago PMI (Feb)

EMEA
- UK GfK Consumer Confidence (Feb)
- Sweden GDP (Q4, final)
- Türkiye GDP (Q4)
- UK Nationwide Housing Price (Feb)
- France Inflation (Feb, prelim)
- France GDP (Q4, final)
- Spain Inflation (Feb, prelim)
- Switzerland GDP (Q4)
- Germany Unemployment Rate (Feb)
- Germany Inflation (Feb, prelim)

APAC
Taiwan Market Holiday
- Japan Tokyo CPI (Feb)
- Japan Industrial Production (Jan, prelim)
- Philippines Trade (Jan)
- Thailand Industrial Production (Jan)
- Hong Kong SAR Trade (Jan)
- India GDP (Q4)

Saturday 28 Feb

APAC
- India Industrial Production (Jan)

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]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-23-february-2026.html~/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-23-february-2026.htmlJingyi Pan | Chris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-23-february-2026.htmlFri, 20 Feb 2026 05:11:51US economic growth came in weaker than many had expected in the fourth quarter of last year, albeit the official data largely mirroring a slowdown in activity tracked by S&P Global PMIs. The latter, provisional data for which are now available up to February, suggest that this slower pace of growth has persisted into the first quarter of 2026.

US growth slows in fourth quarter

US economic growth, as measured by GDP (gross domestic product) slowed from an annualized rate of 4.4% in the third quarter of last year to 1.4% in the fourth quarter, according to the advance official estimate from the Bureau of Economic Analysis.

The federal government shutdown accounted for some of the slowdown, with Federal government spending falling at a 1.15% annualized rate. However, personal spending on goods also fell - albeit only marginally - for the first time since the first quarter of 2024, marking a strong contrast to the robust gains seen in the prior two quarters. Spending on services remained more resilient, though also weakened slightly.

A further major drag was exports, with exports of services falling for a second successive quarter and exports of goods growing at a much-reduced rate.

Helping support growth was a rise in inventories and higher IT spending, both on kit and software, presumably - though not for certain - reflecting higher AI-related investment spending.

PMI signals further weakness to come in early 2026

This growth profile was signalled in advance by S&P Global PMI surveys. These survey data have provided a reliable advance guide to economic growth for nearly two decades in all bar a few instances (such as when financial services activity shrank more in the PMI than captured by the GDP data in 2022).

The headline PMI, tracking output of the goods and services economies, fell from a recent high of 55.1 last July of last year to 52.7 in December - one of its lowest readings seen over the prior year-and-a-half and signaling a marked cooling in growth. The PMI has since held close to this December low in the first two months of 2026, pointing to a sustained weak GDP growth rate. A regression analysis of historical PMI against GDP puts the recent PMI data at a level consistent with 1.5% annualized growth so far in the first quarter.

High prices and low confidence stymie growth

The February PMI showed that a combination of weakened demand, high prices, and adverse weather colluded to dampen business activity, resulting in the slowest expansion of output for ten months.

Customer demand growth was reported to have softened, with orders even falling in factories for the second time in the past three months, often linked to rising prices.

Averages prices charged for goods and services rose at an increased rate again in February, indicative of consumer price inflation running at a pace above the Fed's 2% target.

More encouragingly, companies are suggesting that at least some of this slowdown may prove temporary, partly as extreme weather passes, with business growth expectations rising sharply to the highest for just over a year in February. However, business confidence remains subdued on the whole, as companies worry about the political environment and impact of policies such as tariffs, in turn hitting affordability via higher prices and limiting sales growth for many companies.

Access the latest flash PMI press release here.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

US growth slows behind G4 average

US business activity growth slipped to a ten-month low in February, according to the S&P Global PMI flash data. Japan's expansion meanwhile hit a 33-month high and UK growth climbed to the fastest in 22 months, according to the comparable flash PMI surveys covering goods and services. While the eurozone economy continued to lag behind, it also picked up some momentum to record one of its strongest expansions since mid-2023.

This means that, so far this year, the US expansion is now lagging that of the UK and Japan and drawing closer to the lacklustre pace seen in the eurozone.

Measured across both manufacturing and services, the US has now also slipped below the G4 average in terms of output growth for the first time since April 2024, and for only the second time in the past 34 months. This reflects a steady deterioration of US performance over the past eight months in particular, and represents a marked contrast to the strong outperformance recorded by the US in late 2024. This has also coincided with an 8.4% drop in value of the US dollar against a trade-weighted basket of currencies.

The US's waning performance is notable across both manufacturing and services.

US manufacturing output growth slipped to a seven-month low, contrasting with strengthening gains elsewhere among the G4 economies. Japan's manufacturing output growth surged to the highest for just over four years and the UK's expansion hit a near-one-and-a-half year high, both now outpacing the US. Eurozone production growth meanwhile climbed to a six-month high, with German factory production growth one of the strongest seen since the pandemic.

The US also reported slower service sector growth, which cooled to a ten-month low in February. US services growth consequently fell behind that seen in both the UK and Japan - the latter notching up a 21-month high - and only marginally exceeded that seen in the eurozone.

US reports above average price growth and supply delays

No single factor explains these changing growth dynamics, but several developments have contributed.

In the first instance, the US suffered extreme winter weather in February, which reportedly not only affected customer demand but also disrupted supply chains.

US firms reported a lengthening of supplier delivery delays into factories of a degree not seen since October 2022 (a period when pandemic delays were causing supply chain problems), which impeded output. US supply delays are now exceeding those even of the UK, which has seen a prolonged period of supply delays over the past two years. However, although adverse US weather was cited as a factor causing supply disruption, US firms often reported supply delays to have been caused by tariff-policy related issues, often limiting the supply of imports in particular.

The flash PMI also once again showed above average price growth for the US compared to the other G4 economies in February, helping in part to explain some of the spending aversion reported by many firms. Survey respondents continued to blame tariffs and affordability issues for order book malaise, especially in terms of exports.

US exports slide as Japan's export boom hits eight-year high

While US exports of goods and services have slumped in recent months, exports from the UK and Japan have surged higher. Japan's export boom is now the strongest recorded for eight years and the UK's export growth this year so far is the highest since mid-2021.

US optimism lags peers

US companies also reported labour availability issues as a constraint on business activity, in turn partly tied to US government immigration policies. Broader political uncertainty in the US has also manifested itself in business optimism continuing to run behind the other G4 economies, and notably Japan, where the business mood has become the most buoyant for 15 months.

However, US sentiment did improve markedly in February, albeit still running below its long run average in contrast to the other G4 economies, hinting that companies expect at least some of the current bout of weakness to be temporary. It remains to be seen whether this merely represents hopes that bad weather will clear to reveal a more positive economic environment, or whether the other factors of higher prices, supply delays, tariff and other government policy changes, will continue to subdue US performance.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

The upturn continues to be led by the service sector but there are signs that manufacturing is regaining momentum to join in the recovery, reporting a surge in export orders of a magnitude not seen since the pandemic.

Despite enjoying higher demand for goods and services, companies remain focused on boosting productivity to cut costs, resulting in yet another month of steep job losses to prolong the continual jobs downturn that was initiated by the 2024 autumn Budget.

Higher staffing costs, often attributed to Budget policy changes, meant service sector inflation remained elevated. However, increased competition, especially in the manufacturing sector, is helping keep a lid on inflationary pressures.

Bank of England policymakers will be encouraged by the indications of stronger economic growth, but the relatively modest price pressures being signalled and ongoing worrying labour market weakness will likely result in a growing call for further rate cuts.

Business growth beat expectations

UK businesses are showing further signs of a solid start to 2026, with output rising at an encouragingly robust rate for a second successive month in February. The PMI headline Composite PMI Output Index increased from 53.7 in January to 53.9 in February, according to the preliminary 'flash' reading, its highest since April 2024 and beating expectations of a drop to 53.3, as per a Reuters' poll of economists.

The PMI is broadly consistent with GDP growing at a 0.35% quarterly rate so far in the first quarter, representing a marked improvement on the meagre 0.1% gain signalled for the fourth quarter, which was subsequently corroborated by official GDP data.

New orders growth across goods and services also improved, reaching the fastest since September 2024, boosted by rising exports. Although export orders grew at an unchanged rate in February, January's rise had been the strongest since August 2021.

Manufacturing closes the gap with services as PMI 18-month high

While the expansion continued to be led by the service sector, where business activity growth eased only marginally to remain one of the strongest seen over the past two years, manufacturing closed the gap.

The headline manufacturing PMI struck a one-and-a-half year high as factory output grew for a fifth successive month, rising in February at the fastest rate since September 2024.

New orders placed at factories rose for the third consecutive month, notching up the best back-to-back monthly gains seen for almost four years. Improving foreign trade contributed to this upturn in orders. Overseas demand for goods rose for a second month, rising at the sharpest pace since August 2021.

Pressure on headcounts persists

Higher output and rising inflows of new orders failed, however, to generate a rise in employment. Headcounts were instead cut sharply again in February, continuing the sustained decline that has been recorded by the PMI since October 2024. Businesses have commonly reported the need to cut staffing levels in response to policy measures announced in the 2024 autumn Budget, with the 2025 Budget announcements resulting in further pressure to cut staffing costs. These measures include hikes to the National Minimum Wage and increased employer National Insurance contributions.

This 17-month continual loss of jobs represents the most prolonged period of job cutting recorded by the PMI since the global financial crisis (which triggered a 23-month spell of job shedding up to March 2010).

February's cut to employment was slightly less marked than seen in January, but still steep by historical standards and consistent with around 15k job losses during the month. An especially marked drop in employment was recorded in the service sector, though the decline in manufacturing payrolls was the smallest reported over the past 16 months.

Stubborn inflation

Pressure to reduce headcounts stemmed from rising staff costs, which were in turn reflected in a further elevated rate of service sector input cost inflation in February. These higher costs in turn led to an acceleration of selling price inflation in the service sector to the highest since April of last year.

In contrast, input cost and selling price inflation rates moderated in the manufacturing sector, helping keep a lid on overall price pressures. Average prices charged for goods and services nonetheless rose at the fastest rate for ten months, the rate of inflation picking up for a third successive month.

Comparisons with official inflation data suggest that the PMI survey's selling price gauge is broadly indicative of consumer price inflation falling below the Bank of England's 2% target in the coming months, but then rising again to around 3% into the second half of 2026.

Optimism around outlook dips but remains resilient

Looking ahead, future output expectations fell among businesses in February, but held close to the survey's long-run average to still represent one of the most upbeat assessments seen over the past year and a half.

Read the press release here.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/february-flash-pmi-signals-strengthening-uk-economic-growth-but-job-losses-persist.html~/marketintelligence/en/mi/research-analysis/february-flash-pmi-signals-strengthening-uk-economic-growth-but-job-losses-persist.htmlChris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/february-flash-pmi-signals-strengthening-uk-economic-growth-but-job-losses-persist.htmlFri, 20 Feb 2026 10:52:14The flash Eurozone PMI signalled improved economic growth midway through the first quarter of 2026. The growth dynamic showed further signs of shifting in favour of manufacturing, where output rose at one of the strongest rates seen over the past four years, matched by a four-year high level of business optimism. The headline Manufacturing PMI - a composite indicator based on five survey variables - is now at its highest since June 2022.

While the service sector has lost some momentum in 2026, it nevertheless also continued to see one if its best growth spells in recent years, hinting at a broad-based, though still sluggish economic upturn. The combined survey data for manufacturing and services are signaling quarterly GDP growth of 0.2% so far this year.

Price pressures meanwhile remained largely contained around the central bank's target, albeit with signs of inflation having picked up in recent months, notably in Germany. Rising prices were often blamed on higher wage costs, which were also a contributor to stalled hiring across the eurozone; a factor which could limit the region's further recovery.

Eurozone economy set for 0.2% growth in first quarter

Eurozone business activity grew at an increased rate midway through the first quarter. The seasonally adjusted HCOB Eurozone Composite PMI Output Index, based on approximately 85% of usual survey responses and compiled by S&P Global, rose from 51.3 in January to a three-month high of 51.9 in February, according to the preliminary 'flash' reading. Although below the highs seen in October and November of last year, February's reading was the third-highest since May 2024.

While the PMI over the fourth quarter as a whole was consistent with quarterly GDP growth of 0.3%, the survey data for the first quarter so far are indicative of a slightly weaker 0.2% rate of growth.

An acceleration of growth in the manufacturing economy meant the goods-producing sector outpaced the service sector for the first time since last August and contrasted with much of the post-pandemic period, during which manufacturing has generally acted as a significant drag on the eurozone economy. The February increase in manufacturing output was the largest since March 2022 barring last August's expansion. While service sector growth lagged that of manufacturing, it nevertheless also saw the rate of activity pick up slightly.

Weak demand hits hiring

New orders growth was more disappointing. Although manufacturers reported the largest monthly rise in orders since April 2022, the increase was only modest. Meanwhile, service sector new business inflows rose only very marginally, posting the smallest rise for six months, pointing to subdued demand conditions.

The sluggish order book growth was met by a reluctance to hire new staff. Employment fell marginally across the eurozone for a second successive month after three months of modest gains late last year.

A stalling of service sector jobs growth after five years of continual growth was accompanied by a cooling rate of job losses in manufacturing, adding further to signs that the region's growth engine is moving from services to manufacturing.

Factory optimism at four-year high

This shifting growth dynamic was further highlighted by the forward-looking expectations data from the flash PMI. While February saw business optimism wane slightly in the services economy, optimism in the goods-producing sector rose to its brightest for four years. That said, optimism in the services sector also remained elevated by recent standards, with February's reading being one of the highest seen over the past year and a half.

Measured across both sectors, business output expectations have been running at their highest since mid-2024 so far this year.

German growth strengthens as France reports output dip

Within the eurozone, growth accelerated in Germany to the strongest since May 2023 barring only the upturn seen last October, fueled by accelerating growth across goods and services.

Output meanwhile fell marginally in France, led by a slight drop in service output. More encouragingly, manufacturing output rose for a second month in France, registering the best back-to-back monthly performance for four years.

The rest of the region combined saw output growth moderate to an eight-month low, despite a renewed upturn in goods production.

Germany also stood out in reporting a rise in future output expectations, to the joint-highest in four years, contrasting with reduced - though still elevated - expectations elsewhere in the region.

It was a different picture for employment, however, with German firms cutting headcounts compared to a flat employment picture in France and a solid rise in staffing levels elsewhere on average.

Input cost inflation at 12-month high

The drop in employment in Germany was again linked to the need to reduce costs, and it was notable that German firms reported relatively higher input cost inflation - especially in the service sector. German input costs rose at the fastest rate for three years, with service providers in particular reporting higher wage pressures, in turn partly linked to the higher minimum wage introduced at the start of the year. However, although input cost inflation moderated in France, it also rose across the rest of the eurozone on average, pushing the overall rate of inflation across the region to a 12-month high.

The rate of inflation in output prices meanwhile dipped slightly but remained the second-highest seen over the past year. The current level is nevertheless broadly consistent with inflation running close to the ECB's target of 2%. Although services inflation cooled, manufacturing selling prices rose at the fastest rate since April 2023.

Access the press release here.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

Meanwhile, recent US equity market movements have helped equity market trends align better with macro fundamentals, reflected by PMI data. That said, divergences between sentiment and actual output continue to highlight uncertainties ahead.

US equity investor risk appetite slips to four-month low

The February S&P Global Investment Manager Index survey, which tracks views from a panel of just under 300 participants employed by firms that collectively represent approximately $3,500 billion assets under management, revealed that risk sentiment moderated for the first time in four months.

The IMI's Risk Appetite Index fell to +13% from an over one-year high of +41% in January. While this marks the fifth consecutive month in which US equity investors are risk tolerant, the reading is the lowest since last October. The reduction in risk sentiment was accompanied by fresh pessimism over expectations regarding near-term US equity market returns. This is according to the IMI's Equity Returns Index which fell noticeably from a survey record level in January.

An assessment of what is driving returns in the near-term showed that US equity investors remain highly concerned about the political environment and valuations at the start of February. However, positive expectations regarding central bank policy were also greatly pared back from January as markets priced in a lower chance of rate cuts in the few months of the year.

US PMI and the S&P 500 index

A comparison of the S&P 500 index and the US PMI from S&P Global meanwhile showed a lingering gap between the two, with growth of the former remaining elevated going into the first quarter of the year relative to the PMI's business activity gauge.

Cross-comparison of the US PMI and the equal-weighted S&P 500 index revealed convergence at the start of the year, notably with the year-on-year change of the equal weighted S&P 500 index rising at a quicker pace around the turn of the year with more broad-based gains on the index.

The latest movements across the S&P 500 index therefore reflected a shift away from some of the large-capitalization names and towards other parts of the market, thereby corresponding better with underlying macro fundamental trends. Further moderations of the market capitalization weighted S&P 500 index performance should not be ruled out with the latest IMI findings of lower market returns expectations, whether via of a broad-based pullback or declines on the index level as investors shift between sectors.

Industrials, energy and basic material sectors in favour

Looking at sector preferences among US equity investors, a notable change has been observed midway through the first quarter, as the strongest performers in late-2025 - the financial and healthcare sectors - alongside technology stocks have been knocked down the rankings and replaced by industrials, energy and basic materials as the top three favored sectors. Industrials has now reclaimed the lead among the 11 sectors tracked for the first time in six years.

The reshuffling in preferences among sectors has been driven by recent skepticism over AI investment, with the loss of favor toward AI-related stocks continuing into mid-February at the point of writing.

While the S&P 500 technology sector exhibited resilience in January, reduced preference towards the IT/tech sector, according to the IMI index, and a subdued US Technology Sector PMI Output Index suggest that tech stock prices are still elevated.

More positively, we have seen the comparison of the S&P 500 Growth and Value index converging with fundamentals, as reflected by the S&P Global US PMI Composite Output Index. While the current state of US economy is supportive of growth stocks, their performance relative to value stocks is no longer overstretched with the recent market movements.

Business output and sentiment continue to diverge

Turning to the IMI drivers data again for indications of how fund managers see the global macroeconomic environment, the latest data revealed that investors continue to see the macroeconomy as supportive of US equity market gains, albeit to a slightly smaller degree compared to the start of the year.

Given the high correlation between fund managers' perception of the global macroeconomic environment and the J.P. Morgan Global Composite PMI Output Index, the latest sentiment data from U.S. equity investors suggest that market participants expect global growth to pick up pace from the improvement we have already seen in the opening month of the year. That said, there is nevertheless a noticeable gap that has opened up between the IMI's sentiment data regarding the global macroeconomic environment and actual output. Perhaps more interesting, this disparity is also present between the PMI's actual and future output gauges, albeit in reverse, indicating that businesses themselves are not optimistic that recent output gains will persist.

With the above in mind, we will be looking closely to the February flash PMI releases across major economies on February 20th for early insights into which way will actual output converge midway through the first quarter.

Jingyi Pan, Economics Associate Director, S&P Global Market Intelligence

jingyi.pan@spglobal.com

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Flash PMI survey updates accompanied by key GDP and inflation data

The week ahead should provide plenty of insights into economic trends for markets and policymakers in the world's major economies. Flash PMI survey releases for February are accompanied by inflation numbers in the UK, US and Japan, with the latter two economies also reporting fourth quarter GDP.

The flash PMI data on Friday will provide keenly awaited updates on economic conditions around the world. January's data showed US business activity growing at a reduced rate compared to the strong pace seen through much of late last year, while growth accelerated in Japan, the UK and Australia. Although the eurozone underperformed with only modest growth, it saw the business mood brighten markedly to hint at better times to come. The February PMI data will therefore give insights into whether these growth patterns are continuing to shift in favour of Japan and Europe, while also providing fresh clues as to inflation and hiring trends. Prior data showed price pressures lifting higher globally, though jobs data were more mixed: strong job gains in Japan and Australia contrasted with steep declines in the UK and Germany and a modest jobs gain in the US.

We will also be especially keen to see how overall PMI output levels compare with business sentiment, as a wide disparity continued to persist in January as growth proved resilient despite historically low global confidence (see chart).

Official inflation data are also published in the US on Friday in the form of the Fed's preferred PCE data, which last showed a 2.8% annual rise, alongside the advance estimate of fourth quarter GDP. The Fed's latest decision to hold rates steady will meanwhile be scrutinised through the release of the meeting's minutes on Wednesday. Also watch out for US durable goods orders and industrial production data.

Inflation and fourth quarter GDP data are also published for Japan during the week, with any signs of strong growth and rising inflation likely to tip the balance in favour of an early rate hike by the Bank of Japan.

In Europe, official labour market, inflation and retail sales data will provide more clues as to which way the Bank of England will move after a close decision to hold rates steady at its last policy meeting. The Eurozone benefits from updated consumer confidence and industrial production numbers.

Interest rate decisions are due for New Zealand, Indonesia and the Philippines.

Read more about recent global PMI trends here.

Key diary events

Monday 16 Feb

Americas
Brazil, Canada, US Market Holiday
- Canada Housing Starts (Jan)

EMEA
- Switzerland GDP (Q4, flash)
- Eurozone Industrial Production (Dec)

APAC
China (Mainland), Indonesia, South Korea, Taiwan, Vietnam Market Holiday
- Japan GDP (Q4, prelim)
- Singapore Non-Oil Domestic Exports (Jan)
- Thailand GDP (Q4)

Tuesday 17 Feb

Americas
Brazil Market Holiday
- US ADP Weekly Employment Change
- Canada Inflation (Jan)
- US NY Empire State Manufacturing Index (Feb)
- US NAHB Housing Market Index (Feb)

EMEA
- Germany Inflation (Jan, final)
- UK Labour Market Report (Dec)
- Italy Balance of Trade (Dec)
- Germany ZEW Economic Sentiment Index (Feb)
- Eurozone ZEW Economic Sentiment Index (Feb)

APAC
China (Mainland), Hong Kong SAR, Indonesia, Philippines, Singapore, South Korea, Taiwan, Vietnam Market Holiday
- Australia RBA Meeting Minutes
- Thailand Full Year GDP (2025)

Wednesday 18 Feb

Americas
Brazil Market Holiday
- US Building Permits (Nov, prelim)
- US Durable Goods Orders (Dec)
- US Housing Starts (Dec)
- US Industrial Production (Jan)
- US Fed FOMC Minutes

EMEA
- UK Inflation (Jan)
- France Inflation (Jan, final)

APAC
China (Mainland), Hong Kong SAR, Singapore, South Korea, Taiwan, Vietnam Market Holiday
- Japan Trade (Jan)
- New Zealand RBNZ Interest Rate Decision

Thursday 19 Feb

Americas
- Canada Trade (Dec)
- Canada New Housing Price Index (Jan)
- US Trade (Dec)
- US Wholesale Inventories (Dec, adv.)
- US Pending Home Sales (Jan)

EMEA
- Switzerland Balance of Trade (Jan)
- Spain Balance of Trade (Dec)
- Eurozone Consumer Confidence (Feb, flash)

APAC
China (Mainland), Hong Kong SAR, Taiwan, Vietnam Market Holiday
- Japan Machinery Orders (Dec)
- Australia Employment (Jan)
- Malaysia Inflation (Jan)
- Philippines BSP Interest Rate Decision
- Indonesia BI Interest Rate Decision

Friday 20 Feb

Australia S&P Global Flash PMI, Manufacturing & Services*
Japan S&P Global Flash PMI, Manufacturing & Services*
India HSBC Flash PMI, Manufacturing & Services*
UK S&P Global Flash PMI, Manufacturing & Services*
Germany HCOB Flash PMI, Manufacturing & Services*
France HCOB Flash PMI, Manufacturing & Services*
Eurozone HCOB Flash PMI, Manufacturing & Services*
US S&P Global Flash PMI, Manufacturing & Services*

Americas
- Canada Retail Sales (Dec)
- US Core PCE (Dec)
- US GDP (Q4, adv.)
- US Personal Income and Spending (Dec)
- US New Home Sales (Dec)
- US UoM Sentiment (Feb, final)

EMEA
- Germany PPI (Jan)
- UK Retail Sales (Jan)

APAC
China (Mainland), Taiwan, Vietnam Market Holiday
- New Zealand Trade (Jan)
- Japan CPI (Jan)
- Malaysia Trade (Jan)

* Access press releases of indices produced by S&P Global and relevant sponsors here.

Download full report

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-16-february-2026.html~/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-16-february-2026.htmlJingyi Pan | Chris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-16-february-2026.htmlTue, 10 Feb 2026 03:59:26A number of emerging economies have raised sales tax, or Value Added Tax (VAT), rates in recent months, and the monthly PMI surveys compiled by S&P Global are able to demonstrate the instant impact of these changes on business costs and inflation in the wider economy, as well as provide insights into any lasting effects of the tax hikes.

In particular, January saw VAT increases in Kazakhstan and Russia, following a similar rise in Romania during the second half of 2025. In all cases, PMI price indices spiked higher immediately as costs and selling charges increased sharply.

Rates of inflation surge in Kazakhstan and Russia during January

PMI data for Kazakhstan and Russia pointed to steep accelerations in rates of input cost inflation during January. In Russia, the rise in input prices seen across the combined manufacturing and services sectors was the sharpest for a year, while in Kazakhstan inflation hit a 40-month high. In turn, higher costs were passed through to customers, and PMI data showed that selling prices rose at the sharpest pace since April 2022 in Russia, and the strongest rate since the survey began in March 2019 in Kazakhstan.

The increases in selling prices seen in Kazakhstan and Russia during January were much stronger than in any of the other emerging markets covered by PMI data.

Inflation overwhelmingly linked to VAT rises

Additional comments from the companies surveyed for the PMIs illustrate the causes of changes seen in the data, and the anecdotal evidence for January showed that recent VAT increases in Russia and Kazakhstan were central to the spikes in inflation seen at the start of 2026.

In Russia, the main rate of VAT increased to 22% from 20%, while in Kazakhstan the rise was from 12% to 16%. In both cases, the VAT registration thresholds were also reduced, meaning more companies are now liable for the tax.

Anecdotal evidence from the PMI surveys showed that the impact of the VAT rises was more pronounced at manufacturers than service providers. Just over half of those manufacturers in Kazakhstan that recorded a reason for input costs increasing mentioned VAT. This rose to 94% for output prices. In Russia, the respective proportions were 45% and 79%.

Inflation spike should be short-lived

Given the coverage of PMI surveys around the world, we are able to use historical precedents to anticipate how the effects of the VAT rises in Russia and Kazakhstan will play out in the months ahead.

Russia previously increased VAT at the start of 2019, while more recently Romania raised VAT from 19% to 21% in August 2025. In both cases, sizeable proportions of PMI survey respondents immediately linked rises in input costs and output prices to the hikes in VAT that took place. The impacts were generally short-lived, however, with many fewer firms citing VAT as a reason for higher costs and charges two or three months following the tax rise.

Indeed, PMI data show that rates of inflation spiked higher in the month of VAT rises, before easing back to more normal levels in the subsequent months. It is likely, therefore, that the steep increases in prices seen in Kazakhstan and Russia during January will prove to be a temporary spike, with monthly inflation easing as the opening quarter of the year progresses.

That said, the step change in prices caused by the tax hikes have the potential to limit customer demand, and so PMI data on new orders will need to be closely monitored in the months ahead.

Again, the historical PMI data can help us to predict what the impacts on demand may be by looking back to data for new orders in Russia and Romania. In both cases, demand initially held up for a month or two following the VAT hikes, before subsequently softening. Comments from PMI respondents at the time did not specifically mention VAT as causing reductions in new orders, but it is likely that the effects of higher prices acted to limit demand as contracts came up for renegotiation or companies were striving to secure new customers.

Appendix

The below charts show how the respective PMI Output Prices indices track against monthly changes in consumer prices in Kazakhstan, Romania and Russia.

Andrew Harker
Economics Director, S&P Global Market Intelligence
andrew.harker@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

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Price pressures intensify alongside accelerating global growth

The global economic expansion picked up pace at the start of 2026 amid improvements across both the manufacturing and service sectors. That said, business confidence remained subdued while price pressures intensified, adding doubts to the sustainability of the ongoing expansion.

]The J.P.Morgan Global PMI Composite Output Index - produced by S&P Global - posted 52.5 in January, up from 52.0 in December. Despite signalling stronger growth at the start of the year, the latest reading was the second-lowest since last September. The January PMI is broadly consistent with global GDP growing at an annualized rate of 2.6%, which remains lower than the average GDP growth rate of 3.1% observed in the decade prior to the pandemic.

The latest improvement was attributed to stronger manufacturing output growth, with production notably rising globally at the joint-highest pace since June 2024. The upturn for the goods producing sector was driven by the fastest rise in new orders in nearly a year. Meanwhile global services activity growth also accelerated from December, but the rate of expansion remained subdued compared to the fourth quarter average.

While the stronger economic expansion offered early hopes that the resilient growth over much of 2025 had carried through to the new year, there remain worrying signs, notably in the form of subdued business confidence. Concerns over geopolitical uncertainties, often linked to US policy and tariffs, kept sentiment levels below average at the start of the year, and also resulted in another month of only marginal jobs growth. Additionally, global output price inflation intensified in January as costs continued to rise at an elevated pace, posing further risks to the recovery in demand.

While the rate of global growth has shown only modest change in recent months, the pattern of growth has shown more evident signs of changing. A downshifting of growth in the US in recent months means Australia, the UK and Japan are now outperforming the US.

Europe is meanwhile bucking the ongoing trend of gloomy outlooks across both developed and emerging markets, hinting at a further shifting of global growth trends in the coming months in Europe's favour.

Global PMI rises but growth remains lower gear

A further expansion of the global economy was indicated by S&P Global Market Intelligence's PMI surveys at the start of 2026. The J.P. Morgan Global Composite PMI Output Index, covering manufacturing and services in over 40 economies, rose for the first time in three months, up from December's six-month low of 52.0 to 52.5 in January. Despite the rise, the latest reading was the second-lowest since last September.

Historical comparisons indicate that the latest PMI is broadly consistent with global GDP growing at an annualized rate of 2.6% at the start of 2026, similar to the pace signalled over the fourth quarter of 2025.

The survey data therefore suggest that global economic growth has shown resilience in the face of ongoing low levels of business confidence and elevated geopolitical uncertainty, but is running below its long-term trend rate. Annualized GDP growth averaged 3.2% in the decade prior to the pandemic.

Disappointment came from the forward-looking output expectations index, which showed business optimism about the coming year running well below its long run trend, dipping to a three-month low in January. Confidence was often shaken by the intensifying geopolitical uncertainty seen in the opening weeks of 2026.

Developed world growth led by Australia, the UK and Japan

Although the overall pace of output expansion was little-changed in January, the composition of growth showed further signs of changing more markedly.

Having led the developed world expansion throughout the second half of last year, the US ceded the top spot in January. Growth across the developed economies was instead led by Australia, followed by the UK and Japan. Growth in these economies accelerated to the fastest rates since April 2022, August 2024 and May 2023 respectively. Growth also picked up, albeit more modestly, in the US, but was still the second-weakest seen over the past seven months.

Growth meanwhile slowed to only a modest pace in the eurozone - and to a four-month low - while Canada remained in contraction, where output has risen only once in the past 14 months.

Emerging market growth gains momentum

Growth across the emerging markets edged higher, led once again by India but with mainland China and Russia both expanding at modest rates, helping offset a stalling of growth in Brazil. However, both Brazil and Russia have seen more promising signs of economic recovery after the low points seen for both economies back in September, and China's growth rate edged up to a three-month high.

Europe bucks outlook gloom

In terms of business expectations about output in the year ahead, sentiment remains especially downbeat relative to its long-run average in mainland China and also remains below par in both India and Brazil, often reflecting concerns across emerging markets about the economic environment and international trade outlooks, particularly in the face of US tariff policy.

In the major developed markets, there was a notable divergence, with output expectations rising above long-run averages in both the UK and the eurozone, where sentiment struck 16- and 20-month highs respectively. In contrast, falling confidence in Australia and Japan hints that companies are not expecting January's robust performances to persist, and US confidence fell further below its long run average to point to a further potential cooling of its expansion in the coming months.

Access the Global PMI press release here.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

Manufacturing trade near-stabilises while the exchange of services falls further

The seasonally adjusted PMI New Export Orders Index for the manufacturing sector rose above the equivalent index for services for the first time in seven months, albeit remaining in contraction territory. That said, posting just below the 50.0 no-change mark, the latest reading for the manufacturing sector indicated only a fractional reduction in export demand for goods. The latest downturn was also among the least pronounced in the current ten-month sequence of contraction, thereby pointing to a near stabilisation of goods trade in the PMI context at the start of 2026.

The softening of the goods trade decline unfolded against a backdrop of improving manufacturing conditions in January. Global goods production rose at the joint-sharpest pace since June 2024, driven by the fastest increase in new orders in nearly a year. The acceleration in goods output growth offered encouraging signs at the start of the new year and suggested that the resilience seen for much of 2025 may have carried through into the first quarter of the new year. That said, it remains uncertain if the latest pickup in goods demand and production may be attributed to further front-loading of goods orders as geopolitical tensions were ratcheted up in the beginning of the year. Business sentiment among manufacturers remained subdued by historical standards in January and was little changed compared to the end of last year.

Notably, a worrying trend of rising price pressures may also act as a deterrent for the manufacturing recovery in the coming months. Goods producers lifted their selling prices at the quickest pace in nearly three years amid intensifying input cost inflation, which was in turn caused by both higher US tariffs and rising metal prices as geopolitical uncertainties heightened.

Services exports meanwhile remained in contraction for the second month in a row in January. Although marginal, the rate at which services trade fell was the sharpest since last June.

The steepening of the services trade decline contrasted with stronger growth in overall new business into the sector at the start of the year. That said, the downturn in services new export business was particularly noticeable in the US, which reported the strongest reduction since November 2022, as external demand for services was dampened by geopolitical uncertainties. Excluding the US, global services new export business in fact rose at the quickest rate in almost a year.

Detailed sector PMI revealed a mix of sectors in the lead for export growth at the start of the year. The best performers were the Media, Beverage & Food and Healthcare Services sectors. On the other hand, Real Estate and Forestry & Paper Products remained the worst performers, followed by Chemicals.

Emerging market new export business growth renews while developed economies remain in downturn

After stalling at the end of last year, emerging markets saw a renewed rise in new export orders at the start of the first quarter. The expansion in new export business was broad-based, albeit marginal, across sectors. Goods exports rose fractionally in January after falling in December, driven by gains in India while mainland China also saw a renewed rise in goods demand from abroad. Meanwhile emerging market services firms witnessed stronger inflows of new export business compared to manufacturing, but the rate of growth had softened for the second month in a row.

In contrast, developed markets continued to report lower new export business in January. The rate of decline was the softest in the current downturn that began in June 2022, however, and only slight. This was as a slower reduction in goods new export orders helped to offset a sharper downturn in the service sector.

Number of top ten trading economies in expansion more than double in January

The number of top ten trading economies recording higher goods exports rose from just two in December to five at the start of 2026. Japan, the UK and mainland China joined India and South Korea to record higher goods new export orders in January.

Notably, India and South Korea remained in the lead in January with the rates of growth further picking up from December. While the acceleration in growth was marginal for India, the pace at which South Korean manufacturing new export orders rose was the fastest in almost five years, attributed to new product launches.

Meanwhile both Japan and the UK saw their first expansion in new export orders in around four years as foreign demand picked up. Mainland China similarly observed a renewed rise in external demand for goods, though the increase was only slight.

On the other hand, Canada and Brazil continued to record the steepest downturns in goods trade at the start of the fourth quarter, plagued by lingering trade woes with the US. This was followed by the US, itself seeing a more pronounced fall in goods new export orders in January. Finally, the EU and Russia noted marginal reductions in goods trade at the start of the year.

Access the global press release here.

Jingyi Pan, Economics Associate Director, S&P Global Market Intelligence

jingyi.pan@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

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US non-farm payrolls and inflation rescheduled, UK and eurozone GDP

The coming week sees the delayed publication of official US labor market and inflation data, both having the potential to fuel Fed policy expectations. Mainland China likewise provides an inflation update and the UK and Eurozone issue fresh GDP numbers.

The federal government shutdown means the release of the US employment report has been delayed from 6th February to 11th February, and the inflation (CPI) release has been pushed back to the 13th. Payroll growth is expected to have risen from 50k in December to 70k in January and the unemployment rate to have held at 4.4%, while earnings growth looks to have cooled to 3.6% from 3.8%. If borne out, this would likely add to an easing bias among policymakers, though not shift expectations that rates are on hold in the near-term. The update to CPI inflation could be more market moving if there is any material change in the headline or core rates, after they held steady at 2.7% and 2.6% respectively in December. PMI data hint at sustained above-target inflation, but any marked cooling will add renewed fuel to rate cut calls. The FOMC held rates steady at 3.5-3.75% in January after cutting three times late last year, citing the need to wait and assess labor market and inflation trends.

Inflation data are also updated for mainland China and will be eyed in particular for evidence as to whether deflationary pressures are becoming less of a concern. PMI data showed the first rise in business selling prices for 14 months in January, and prior CPI data showed the annual inflation rate hitting a near-three year high of 0.8% in December.

In Europe, the UK comes into added focus after a surprisingly tight decision to hold interest rates steady at the Bank of England's February meeting. The meeting lifted the odds of a rate cut in March. Policymakers are concerned in particular about the labour market's recent weakness, drawing eyes on Monday's upcoming recruitment industry survey. However, monthly GDP for December, plus a full fourth quarter GDP reading, will also give some guidance as to whether the UK economy is picking up momentum, as indicated by the latest PMI numbers. Eurozone GDP is also updated for the fourth quarter, having initially shown a 0.3% rise, in line with the PMI.

Also watch out for Tuesday's Investment Manager Index™ (IMI™), polling fund managers for their views on market trends and drivers at the start of February. January's edition is available here.

Shifting economic trends

US jobs data and GDP numbers for both the eurozone and UK will give some further guidance on how these major economies are performing. The official data follow PMI numbers which showed the US ceding its lead among the largest developed economies in January. Having stepped lower in December, US business output growth failed to regain much momentum in January amid order book weakness. Meanwhile, growth accelerated in the UK alongside similar upturns in Japan and Australia. Although eurozone growth continued to lag, European companies reported a marked up turn in business confidence about the year ahead, bucking a broader global trend of relatively gloomy outlooks.

Read more about the latest global PMI trends here.

Key diary events

Monday 9 Feb

Americas
- Mexico Inflation (Jan)
- US Consumer Inflation Expectations (Jan)

EMEA
- Norway GDP (Q4)
- Switzerland Consumer Confidence (Jan)
- UK KPMG / REC Report on Jobs (Jan)

APAC
- Japan Current Account (Dec)
- Australia Household Spending (Dec)
- Indonesia Consumer Confidence (Jan)
- Malaysia Industrial Production (Dec)
- Taiwan Trade (Jan)

Tuesday 10 Feb

S&P Global Investment Manager Index* (Feb)

GEP Global Supply Chain Volatility Index* (Jan)

Americas
- Brazil Inflation (Jan)
- US ADP Weekly Employment Change
- US Retail Sales (Dec)
- US Import and Export Prices (Dec)
- US Business Inventories (Nov)

EMEA
- UK BRC Retail Sales Monitor (Jan)
- France Unemployment Rate (Q4)
- Türkiye Industrial Production (Dec)

APAC
- Australia Westpac Consumer Confidence Change (Feb)
- Australia NAB Business Confidence (Jan)

Wednesday 11 Feb

Americas
- Mexico Industrial Production (Dec)
- US Monthly Budget Statement (Jan)
- US employment report, incl. non-farm payrolls (Jan)

EMEA
- Türkiye Retail Sales (Dec)
- Italy Industrial Production (Dec)

APAC
Japan Market Holiday
- South Korea Unemployment Rate (Jan)
- Australia Home Loans (Q4)
- China (Mainland) CPI, PPI (Jan)
- Malaysia Unemployment Rate (Dec)

Thursday 12 Feb

Americas
- US Initial Jobless Claims
- US Existing Home Sales (Jan)

EMEA
- UK RICS House Price Balance (Jan)
- UK GDP (Q4, prelim)
- United Kingdom monthly GDP, incl. Manufacturing, Services and Construction Output (Dec)

APAC
Taiwan Market Holiday
- Japan PPI (Jan)
- Australia Consumer Inflation Expectations (Feb)
- Japan Machine Tool Orders (Jan)
- India Inflation (Jan)

Friday 13 Feb

Americas
- Brazil Retail Sales (Dec)
- US CPI (Jan)

EMEA
- Germany Wholesale Prices (Jan)
- Switzerland Inflation (Jan)
- Spain Inflation (Jan, final)
- Eurozone Trade (Dec)
- Eurozone GDP (Q4, 2nd est.)

APAC
Taiwan Market Holiday
- South Korea Import and Export Prices (Jan)
- China (Mainland) House Price Index (Jan)
- Malaysia GDP (Q4)
- India WPI (Jan)

Saturday 14 Feb

APAC
- China (Mainland) M2, Loan Growth, New Yuan Loans
- China (Mainland) Current Account (Q4, prelim)

* Access press releases of indices produced by S&P Global and relevant sponsors here.

Download full report

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-9-february-2026.html~/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-9-february-2026.htmlJingyi Pan | Chris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-9-february-2026.htmlThu, 05 Feb 2026 02:32:41The global economic upturn failed to fully regain earlier momentum in January, having slowed in December, due largely to a cooling in demand growth for financial services around the turn of the year, according to global PMI data. More positively, improved manufacturing growth has slipped over to drive a faster upturn among industrial service providers. The global upturn, while lacking strength, consequently remained encouragingly broad-based by recent standards.

Global business growth off recent highs

January saw an uptick to global economic growth, according to the worldwide PMI surveys produced by S&P Global in association with ISM and IFPSM for J.P.Morgan. However, the rate of expansion remained the second-weakest recorded since last July, the reduced pace of expansion largely due to a service sector slowdown over the turn of the year.

While manufacturing output growth kicked higher globally in January, rising to the joint-highest since June 2024, service sector growth edged up only slightly from December's six-month low, failing to regain prior momentum.

Financial services report cooler demand growth

Digging deeper, a key element of the service sector slowdown around the turn of the year has been weaker growth of financial services activity. Over December and January, the PMI output index of the global financial services sector averaged just 52.5 against 55.2 during the prior six months. New orders growth for financial services has likewise slowed over this period. Compared to the situation seen prior to November, demand has cooled markedly for banking services globally but also for insurance and other financial services (such as investment and pension funds), while real estate has seen a renewed drop in demand over both December and January.

The slowdown in financial services activity growth in part reflects a similar moderation in the extent to which financial conditions have been loosening over the past two months, as depicted for example by the Chicago Fed's financial conditions index.

However, it is not just growth of financial services that has slowed over the turn of the year. Growth of technology and consumer services in particular remain well off the highs seen over the second half of last year, acting as further dampeners on global service sector activity.

Manufacturing spillovers

More encouragingly, growth of industrial services output has picked up heading into 2026, with January seeing the sharpest rise in new orders for this sector since April 2023. This suggests that some of the recent improved performance of the manufacturing sector is spilling over to related services providers.

Broad-based upturn

January's improvement in manufacturing performance was by no means broad-based, with construction materials, metals & mining and autos & parts all reporting reduced production volumes at the start of the year. But with only three sectors in decline globally across both manufacturing and services, the number of sectors reporting an expansion of global output in January remains one of the highest recorded since the pandemic and suggests that, although not impressive in terms of strength, the global upturn at least remains encouragingly broad-based.

Access the Global PMI press release here.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/financial-services-growth-restrains-global-economy-in-january-Feb26.html~/marketintelligence/en/mi/research-analysis/financial-services-growth-restrains-global-economy-in-january-Feb26.htmlChris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/financial-services-growth-restrains-global-economy-in-january-Feb26.htmlThu, 05 Feb 2026 12:07:54Global manufacturing reported the greatest improvement in business conditions seen for nearly four years in February, according to PMI data, reflecting rising demand and stronger global trade flows. However, the upturn was uneven, with faster growth in Asia, and notably the ASEAN region, as well as Europe contrasting with slower growth in North America.

Business confidence also lifted higher, though that was prior to the news of US-Israeli attacks on Iran and the recent changes to US tariff policies, all of which has the potential to adversely impact the health of the manufacturing economy in March.

Manufacturing PMI at 44-month high

Global manufacturing growth accelerated to a 44-month high in February, according to PMI data sponsored by J.P. Morgan and compiled by S&P Global Market Intelligence. The headline global manufacturing PMI rose from 50.9 in January to 51.9, its highest since June 2022 - a time when manufacturing was benefitting from a surge in demand for goods during the COVID-19 pandemic.

Factory output growth hit the highest since December 2021, fed by the steepest rise in new orders for four years. The latter was in turn buoyed by reviving global trade flows, with exports rising worldwide at a rate not beaten since July 2021.

ASEAN PMI at all-time high

The top five spots in the output growth rankings were all held by Asia economies, helping push the ASEAN PMI in particular to the highest recorded since comparable data were first available in 2012.

The fastest production growth was recorded in India, followed by Vietnam, Thailand, the Philippines and Taiwan. Output growth in the Philippines was the highest recorded since November 2018, while Taiwan's expansion was notable in being the strongest since July 2021. Other noteworthy highs in terms of rates of output growth were seen in Japan, mainland China, Vietnam and the UK, where expansions were the fastest since January 2022, June 2024, July 2024, and September 2024 respectively.

North America bucks global trend as output slows

While growth accelerated across both Asia and Europe - the eurozone's output gain was the second-strongest for almost four years, growth slowed across North America to a five-month low, albeit limited in part by adverse weather. An especially steep downturn in production was again recorded in Mexico, which reported the sharpest decline of all countries surveyed, while output stagnated in Canada. US output growth meanwhile slipped to a five-month low.

Confidence builds, for now

To gain a sense of where production trends will head in the coming months, we track companies' expectations of how they anticipate their output will change in the year ahead.

Collectively, global manufacturing expectations hit the joint-highest since March 2024. Especially marked improvements were seen in Japan and mainland China, as well as across the eurozone and in the US, hinting at an evening-out of the expansion as weather related disruptions fade in North America.

However, the February PMI data were collected over a period which largely fell before the US Supreme Court decision on US tariffs and fully prior to the escalation of conflict in the Middle East. The ensuing uncertainty over US tariff policy and geopolitical events not only have the potential to dampen business confidence globally but are also already impacting prices and supply chains to the detriment of manufacturers.

March PMI data will therefore provide critical insights into how these events have affected manufacturing worldwide, revealing whether February's improvement in the business situation has been knocked off course or whether businesses have proven resilient.

Access the latest global PMI press release here.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/global-manufacturing-pmi-near-fouryear-high-ahead-of-war-Mar26.html~/marketintelligence/en/mi/research-analysis/global-manufacturing-pmi-near-fouryear-high-ahead-of-war-Mar26.htmlChris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/global-manufacturing-pmi-near-fouryear-high-ahead-of-war-Mar26.htmlTue, 03 Feb 2026 05:36:00Global manufacturing business conditions improved at a modest but increased pace at the start of 2026, with an especially encouraging rise in the numbers of economies reporting higher production. Total worldwide output growth was the joint-sharpest since June 2024.

Looking ahead, manufacturing optimism has proven resilient in the face of heightened geopolitical uncertainty at the start of the year, notably in Europe, albeit remaining very subdued by historical standards.

One area of concern to monitor going forward is the recent rise in industrial input prices, notably for metals and energy, itself often driven by geopolitical worries, which has led to the steepest rise in global goods prices for three years.

Manufacturing starts 2026 on solid footing

Global manufacturing got off to a modest but encouraging start to 2026, according to PMI data sponsored by J.P. Morgan and compiled by S&P Global Market Intelligence. The headline global manufacturing PMI rose from 50.4 to a three-month high of 50.9, signalling a sustained, albeit subdued, improvement of business conditions for a sixth straight month.

Although the index remains only modestly in expansion territory (i.e. above the 50.0 no change level), the ongoing resilience of the manufacturing sector in the face of heightened geopolitical tensions at the start of 2026 is itself encouraging. Some of the PMI's sub-indices also helped fuel some tentative optimism about the start of the year.

In particular, the PMI's output index, measuring global factory production growth, started 2026 at its joint-highest since June 2024, matched by August 2025. New orders also edged higher at the fastest rate since February of last year, helped in part by a near-steadying of global export orders.

US and ASEAN lead upturn

Looking further into output trends, especially strong gains were seen in India, the US and the ASEAN economies, the latter led by Vietnam. While the Indian expansion follows a general pattern of robust growth in recent years, the US expansion was notable in having not been bettered since March 2022 and the ASEAN increase was the joint-highest since April 2023.

There were other highs also worth noting: output growth in Japan hit a 45-month high, while an 11-month high was seen in Taiwan and South Korea's upturn was the joint-strongest in 17 months, accompanied by a modest sustained upturn in mainland China. In Europe, the UK's expansion was the fastest in 16 months, accompanied by a return to growth in the eurozone.

Even Canada, hard hit by US trade policy, reported a marginal return of production growth for the first time in a year. Australia meanwhile reported one of its best gains seen over the past three years.

Areas of stress persist, however, including strong downturns in Mexico and Brazil, widely blamed by producers on US tariffs, and in parts of Europe. But nearly three quarters of all economies surveyed reported rising output in January, up from just over half at the end of last year.

Outlook for 2026

Whether this improvement sets the scene for a better performance for manufacturing in 2026 compared to 2025, which saw the global PMI manufacturing output index average just 50.8, is uncertain.

In Europe, increased fiscal spending is anticipated to be a key driver of improved manufacturing performance, benefitting defense-related manufacturers in particular. Interest rates have also fallen in many economies, notably in the US and Europe, in theory helping to stimulate consumer demand and investment. Financial markets gains are also helping via a wealth effect.

Cost of living pressures have meanwhile eased in many economies compared to this time last year. Global consumer price inflation was running at 3.1% last December, down from 3.7% at the end of 2024 and 4.5% at the end of 2023.

Companies are also adapting to a 'new normal' of uncertainty, building supply chain resilience and diversifying into new markets. Although US tariffs remain a potential headwind to trade growth, we are seeing companies in economies such as mainland China, Canada and across Southeast Asia report new export trading opportunities as companies diversify away from US markets.

Hence business confidence regarding the year-ahead outlook in the manufacturing economy nudged higher globally in January, reaching a ten-month high. However, despite this improvement, confidence remains well below its long run average, principally reflecting heightened uncertainty over the geopolitical environment.

This uncertainty discourages business spending, hiring and investment, dampening any optimism about manufacturing growth in 2026.

Below-par confidence is evident in the US, mainland China, India, Japan and even on average across the ASEAN economy, albeit the latter showing signs of returning to norms, having picked up markedly since last April's US tariff announcements.

However, perhaps most encouraging is the above-par sentiment being witnessed in Europe, potentially signaling a shift in in the global pattern of manufacturing growth over the coming year towards a part of the world that may be reviving after several years of struggle.

Keeping an eye on prices

One further aspect of the manufacturing environment to monitor is prices. Although lower manufacturing price growth helped to reduce consumer price inflation over prior post-pandemic years, 2026 starts with the steepest growth of producer price costs for three years, feeding through to the largest rise in factory gate selling prices for nearly three years.

Even if the US is excluded, which has seen PMI respondents report higher price growth due to import tariffs, global producer input price growth is likewise up to a pace not beaten over the past three years.

Some of this cost growth reflects geopolitics, which have led to a sharp rise in metals prices during January, notably for copper and steel, as well as energy, all of which are key inputs and have the potential to feed through to higher consumer price inflation (in turn dampening interest rate cut expectations) or squeezed profit margins. While this price growth is not yet at a worrying level by historical standards, further increases could become more concerning for the outlook and need to be monitored alongside any accompanying supply chain stress.

Access the latest global PMI press release here.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

Weak sales were often linked to high prices, with factory gate selling prices rising at an increased rate at the start of the year, often blamed on tariffs. However, more encouragingly, the January survey brought signs that input cost inflation is trending lower in US factories compared to the peaks seen last year, and business confidence is also holding up well, albeit constrained by political uncertainty.

Production surges higher

US manufacturing output growth surged higher in January. The headline S&P Global US Manufacturing Purchasing Managers' Index™ (PMI®), recorded 52.4 in January. That was up from 51.8 in December. The upturn in the PMI was driven in particular by a faster rate of output growth: factory production reportedly grew at the fastest rate since last August, which had in turn been the best performance since May 2022.

The PMI data are broadly indicative of factory output growing at a quarterly rate of approximately 1%, hinting at an improvement in the upcoming official manufacturing output data.

However, this brighter news is tainted by reports of ongoing subdued sales growth, which rebounded only modestly after a drop in orders was recorded in December. That had been the first fall in demand for US goods since December 2024.

Order book risks

Over the latest three months, the PMI new orders index has averaged just 50.8. That compares with an average output index reading of 54.4 over this period. This indicates that production growth is significantly outpacing that of new orders to the greatest extent since the global financial crisis back in early 2009. This highly unusual situation is clearly unsustainable, hinting at risks of a production slowdown (and a potential knock-on effect on employment), unless demand improves markedly in the coming months.

Sales growth curbed by affordability

Sluggish sales and order book growth are being commonly linked to customer resistance to high prices, in turn often blamed on tariffs. Average prices charged by producers rose in January at an increased rate, registering the steepest monthly increase since last August.

However, some better news has appeared in recent months, with input cost inflation showing a cooling trend. January's rise in manufacturing costs was the second-weakest recorded over the past 11 months, albeit up slightly on December. This slower cost growth could take some pressure off selling prices in the coming months.

Confidence holding up

Meanwhile, although still running just below the long-run trend level, business growth expectations for the year ahead are holding up. Firms generally anticipate improving demand, thanks in part to lower interest rates, reduced import competition due to tariffs, and more government support. However, political uncertainty clearly remains a key drag on business sentiment, according to survey responses, dampening spending by both businesses and households.

The outlook for manufacturing therefore very much depends on whether the order book situation can indeed improve to match these expectations, or whether production growth will need to be adjusted lower in the face of persistent weaker-than-anticipated sales.

Access the press release here.

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

Download full report

PMIs, payrolls and policy meetings

Highlights from the coming week's data diary include the US employment report, global PMI surveys and eurozone inflation, while central bank decisions are scheduled for the UK, the euro area and Australia.

PMI surveys of both manufacturing and service sector business conditions are published during the week and will provide insights into growth, trade, inflation and job market trends around the world at the start of 2026. Prior data showed global growth having cooled to a six-month low in December, in part linked to a slowing US economy. This softer pace of US growth likely persisted into January, according to the flash PMIs, contrasting with some more encouraging signals from Europe and Japan. PMI updates from mainland China and ASEAN economies will also be eagerly awaited, especially after the latter showed signs of reviving despite the uncertain global trade environment.

The PMIs build the scene ahead of Friday's non-farm payroll report, which will provide guidance on a key area of concern to US policymakers. With inflation having so far proven more benign that many hawks had feared, the focus has been on the need to cut rates in response to the recent softness of the labor market. December's report showed just 50k jobs created after a similarly subdued 56k rise in November, with the unemployment rate running at 4.4%, one of the highest rates for four years. But there is a growing belief that a more serious downturn in the labor market might be necessary to prompt any further loosening from the Fed, meaning Friday's report could prove material in guiding rate expectations.

No change in policy is meanwhile expected when ECB rate setters meet on Thursday, with the central bank seeing itself as being in a "good place". Eurozone inflation has been hovering around the ECB's target in recent months, and the economy is showing modest signs of improvement.

While Bank of England officials have also become more relaxed about the inflation outlook, and there are signs that UK business activity has picked up since last year's Budget, there are worries about the growth outlook amid a slumping labour market. Although no change in policy is priced in by many for the coming week's Bank of England meeting, a rate cut is seen as a possibility in March.

In APAC, market anticipation has built for a February hike by the Reserve Bank of Australia following recent upside CPI surprises, though the latest flash PMI data suggest that price pressures could moderate again in the coming months.

How long can business output growth diverge from expectations?

Over much of 2025 the worldwide PMI surveys tracked an unusual divergence whereby robust, resilient global business output growth (and GDP) contrasted with historically subdued levels of business confidence (as measured by firms' expectations of growth over the coming year). Doubts over whether this resilience can be sustained into 2026 were raised by output growth succumbing to a six-month low in December. January's PMI data, due in the coming week, will therefore provide new insights into these output and sentiment trends, and likely set the scene for the global economic outlook over 2026.

We will be looking to see whether resilience has persisted with December being a temporary slowdown, or whether output growth has continued to moderate in the face of low business optimism. More worryingly, have business confidence and growth cooled further amid heightened geopolitical concerns?

Key diary events

Monday 2 Feb

Worldwide Manufacturing PMIs, incl. global PMI* (Jan)

Americas
Mexico Market Holiday
- US ISM Manufacturing PMI (Jan)

EMEA
- Germany Retail Sales (Dec)
- Switzerland Retail Sales (Dec)

APAC
Malaysia Market Holiday
- Indonesia Balance of Trade (Dec)
- Indonesia Inflation (Jan)

Tuesday 3 Feb

Americas
- Brazil Industrial Production (Dec)
- Mexico Business Confidence (Jan)
- Mexico Manufacturing PMI* (Jan)
- US JOLTs Job Openings (Dec)

EMEA
- Türkiye Inflation (Jan)
- France Inflation (Jan, prelim)
- Spain Unemployment Change (Jan)

APAC
- South Korea Inflation (Jan)
- Australia Building Permits (Dec, prelim)
- Taiwan Consumer Confidence (Jan)
- Australia RBA Interest Rate Decision
- Hong Kong SAR GDP (Q4, adv)
- Pakistan Inflation (Jan)

Wednesday 4 Feb

Worldwide Services, Composite PMIs, inc. global PMI* (Jan)

Global Sector PMI* (Jan)

Americas
- US ADP Employment Change (Jan)
- US ISM Services PMI (Jan)

EMEA
- Eurozone Inflation (Jan, flash)
- Italy Inflation (Jan, prelim)

APAC
- New Zealand Employment Change (Q4)

Thursday 5 Feb

Americas
- US Initial Jobless Claims
- US Balance of Trade (Dec)
- Brazil Balance of Trade (Jan)
- Mexico Banxico Interest Rate Decision

EMEA
- Germany Factory Orders (Dec)
- France Industrial Production (Dec)
- Eurozone HCOB Construction PMI* (Jan)
- Italy Retail Sales (Dec)
- UK S&P Global Construction PMI* (Jan)
- Eurozone Retail Sales (Dec)
- UK BoE Interest Rate Decision
- Eurozone ECB Interest Rate Decision

APAC
Pakistan Market Holiday
- Australia Balance of Trade (Dec)
- Philippines Inflation (Jan)
- Thailand Inflation (Jan)
- Indonesia GDP (Q4)
- Taiwan Inflation (Jan)

Friday 6 Feb

Americas
- Canada Employment Change (Jan)
- US Non-Farm Payrolls, Unemployment Rate, Average Hourly Earnings (Jan)
- US UoM Sentiment (Feb, prelim)

EMEA
- Germany Balance of Trade (Dec)
- Germany Industrial Production (Dec)
- Sweden Inflation (Jan, prelim)
- France Balance of Trade (Dec)
- Spain Industrial Production (Dec)
- Switzerland Unemployment Rate (Jan)
- UK Halifax House Price Index* (Jan)

APAC
New Zealand Market Holiday
- Japan Household Spending (Dec)
- Philippines Industrial Production (Dec)
- India RBI Interest Rate Decision

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Although the UK led in terms of output growth in January, it continued to report a worryingly high rate of job losses, in marked contrast to a jump in hiring in Japan.

UK growth outpaces G4 rivals as US expansion loses momentum

Measured across both goods and services, S&P Global's flash PMI data showed output rising in all four largest developed economies for a ninth successive month in January. The four economies collectively reported a slight acceleration of growth and an overall expansion of output for the twenty-sixth month.

However, whereas the US had recorded the strongest growth of the G4 over the final eight months of 2025, having dominated the G4 expansion over much of the past two years, the UK overtook the US at the start of 2026, leading the G4 growth rankings for the first time since April 2024.

While UK businesses reported a marked acceleration of output growth to the fastest since April 2024, US growth improved only marginally on the eight-month low recorded in December, representing a down-shifting of gear compared to the stronger rates of US expansion seen in prior months.

Growth also accelerated in Japan, reaching the highest since August 2024 and now matching the rate of expansion reported in the US in January.

Lagging the G4, the eurozone only reported modest growth, the rate of increase unchanged on December. The recent growth in the eurozone nevertheless represents it best spell since early 2023.

US firms report lower confidence

The flash PMI surveys also signalled some strong divergences in business confidence about the year ahead, hinting at an underperformance by the US in coming months.

Rebasing the PMI diffusion indices to reflect divergences from long-run trends, business expectations are now running at levels above long-run averages in both the UK and eurozone, reaching 16- and 20-month highs respectively. While confidence slipped to a three-month low in Japan, it was in line with both the long-run average and the average seen in 2025. In contrast, US business expectations sank further below the long-run average in January, dropping to its lowest since last October.

Steep UK job losses persist as Japan reports hiring spree

The slower output growth and relatively low optimism seen in the US translated into a second month of only marginal employment growth in January. Eurozone firms also remained wary of taking on staff, reporting a slight dip in payroll numbers. In contrast, Japanese firms reported a hiring spree which led to the sharpest rise in employment since April 2019.

The UK meanwhile continued to see especially steep job losses, as has been the case since late-2024, reflecting reports of the ongoing need to offset higher staffing costs associated with new government policies announced that year.

US reports further tariff-related price growth

The UK's higher staffing cost policy measures ensured input cost inflation in the UK continued to outpace that of the other G4 economies in January, though in terms of selling prices it was the US that once again reported the sharpest rate of increase. US firms have reported the highest price growth of the G4 economies since last May, following the announcement of US tariffs.

Firms in the US across both manufacturing and services continued to link high price growth to tariffs in January, and these high prices were in turn often blamed by US firms on the weakening of demand growth in recent months, helping to explain some of the slowdown in US business activity growth around the turn of the year.

That said, the flash PMIs are also picking up an increase in selling price inflation in Europe and Japan in January, suggesting global price pressures may be on the rise again.

Access the US, UK, Eurozone and Japan Flash PMI press releases.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/january-flash-pmis-show-uk-taking-economic-growth-lead-among-major-developed-economies-Jan26.html~/marketintelligence/en/mi/research-analysis/january-flash-pmis-show-uk-taking-economic-growth-lead-among-major-developed-economies-Jan26.htmlChris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/january-flash-pmis-show-uk-taking-economic-growth-lead-among-major-developed-economies-Jan26.htmlFri, 23 Jan 2026 04:16:25The January flash PMI brought news of sustained economic growth at the start of the year, but also brought further signs that the rate of expansion has cooled over the turn of the new year compared to the hotter pace indicated back in the fall.

The survey is signaling annualized GDP growth of 1.5% for both December and January, and a worryingly subdued rate of new business growth across both manufacturing and services adds further to signs that first quarter growth could disappoint.

Jobs growth is meanwhile already disappointing, with near-stagnant payroll numbers reported again in January, as businesses worry about taking on more staff in an environment of uncertainty, weak demand and high costs.

Confidence in the year ahead outlook meanwhile remained positive but dipped slightly lower, as hopes for sustained economic growth and favorable demand conditions were somewhat offset by ongoing worries over the political environment and higher prices.

Increased costs, widely blamed on tariffs, are again cited as a key driver of higher prices for both goods and services in January, meaning inflation and affordability remains a widespread concern among businesses.

Business growth remains in lower gear

The headline S&P Global US PMI® Composite Output Index signalled ongoing growth of business activity at the start of 2026. Output has now grown continually for exactly three years. However, at 52.8, up fractionally from 52.7 in December, the 'flash' reading (based on about 85% of usual survey responses) signalled only a marginal improvement in growth from December's eight-month low.

The sustained upturn was driven by a rise in new order growth from December's 20-month low. The rate of expansion was nevertheless the second-lowest seen over the past nine months, remaining well below the highs seen in the second half of last year and suggestive of soft underlying demand at the turn of the year.

By sector, services recorded a solid rise in activity, although growth was unchanged on December's eight-month low. Moreover, despite inflows of new orders into services companies picking up compared to December, the latest growth was again notably below average.

There was better news from manufacturing, where output growth picked up to the highest since last August, reaching the second-strongest since May 2022. That said, new orders for manufactured goods rose only slightly following a fall in December, hinting that underlying growth of demand for goods remains weak compared to levels typically seen in 2025.

Export markets were a key source of order book weakness for both manufacturing and services, resulting in the largest drop in overall new export orders since April 2025. While goods exports fell at the fastest pace since last April, exports of services fell at a rate not seen since November 2022.

Inventories continue to rise

With output growth remaining solid in the manufacturing sector but inflows of new orders rising only slightly, producers reported a further increase in stocks of finished goods in January, marking the eighth rise in the past nine months. Although January's increase in inventories was the smallest seen since last July, typical inventory growth in recent months has comfortably been the strongest recorded since survey data were first available in 2007.

Input buying meanwhile rose at the sharpest rate since last June as firms increased purchasing to meet production needs. However, inventories of inputs were unchanged overall in the latest survey period.

Employment stalls

Employment rose only slightly in January following a similarly weak increase reported in December. The near-stalled job market reflected concerns from companies over rising costs and softer sales growth in recent months. Only a marginal rise in payroll numbers was reported across the service sector while manufacturing jobs growth weakened to a six-month low.

Prices continue to rise sharply

Input cost inflation remained elevated in January, though moderated from December's seven-month high to sit at the weakest since last April. The moderation reflected a cooling of input cost inflation in the service sector, as manufacturing input prices rose at the fastest pace since last September, once again widely blamed on tariffs.

The stubbornly elevated level of input cost inflation fed through to a further widespread rise in selling prices for goods and services. January's rise in average prices charged was slightly weaker than seen in December but still among the largest recorded over the last three years. While service sector charges rose at a slightly reduced rate in January, factory gate price inflation hit a five-month high, often attributed to the need to pass tariff-related costs or broader raw material price rises on to customers.

Less optimism

Companies' expectations about output in the year ahead remained positive but weakened slightly in January to drop slightly below the average seen last year. Continuing the trend seen in recent months, manufacturers expressed greater optimism about growth prospects in the year ahead than service providers, with confidence rising to a seven-month high amongst the former but slipping to a three-month low for the latter.

Confidence principally stemmed from hopes of rising domestic demand, often linked to broader economic growth expectations, government stimulus, strong financial markets and lower interest rates, with manufacturers also reporting protection from tariffs. However, the demand dampening impact of geopolitical worries and federal government policies remained a concern among many firms, holding confidence below prior highs and below its long-run average.

Access the press release here.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/flash-us-pmi-signals-business-growth-in-lower-gear-at-start-of-2026-Jan26.html~/marketintelligence/en/mi/research-analysis/flash-us-pmi-signals-business-growth-in-lower-gear-at-start-of-2026-Jan26.htmlChris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/flash-us-pmi-signals-business-growth-in-lower-gear-at-start-of-2026-Jan26.htmlFri, 23 Jan 2026 12:53:21Eurozone businesses reported steady growth at the start of 2026, pointing to a sustained but modest economic recovery, according to the flash PMI. However, expectations for growth in the year ahead have become markedly more optimistic, hitting a 20-month high, led by improving sentiment in both Germany and France.

With output expectations in manufacturing now near a four-year high, there are encouraging signs that the goods producing sector is continuing to revive, providing an additional spur to growth that has in recent months been largely led by the service sector.

Disappointment came from a renewed downturn in employment and a rise in selling price inflation, though in both cases this was largely driven by a sharp rise in Germany's minimum wage at the start of the year.

The improvement in business confidence is especially welcome as data were collected between 12-21 January, spanning a period which saw heightened geopolitical tensions between Europe and the US.

Eurozone economy sustains steady expansion in January

Eurozone business activity continued to grow at a modest rate in January, according to flash PMI data. The seasonally adjusted HCOB Flash Eurozone Composite PMI Output Index, based on approximately 85% of usual survey responses and compiled by S&P Global, held steady compared to December at 51.5.

Running above the 50.0 no-change mark for a thirteenth straight month, the PMI signalled a further expansion of business activity at the start of 2026. This follows the eurozone's best quarterly performance since the second quarter of 2022 at the end of 2025.

However, growth remains below the stronger rates seen in October and November. While the PMI over the fourth quarter as a whole was consistent with quarterly GDP growth of just over 0.3%., this pace has dipped to 0.25% in December and January.

Growth was again driven by the service sector in January, albeit with business activity growth and new orders inflows both cooling to the slowest since last September.

Manufacturing meanwhile eked out a marginal increase in output, contrasting with a slight decline in December but painting a picture of a goods-producing sector that is struggling to sustain the modest output gains seen over much of last year amid sustained demand weakness. New orders into factories fell for the fourth time in the past five months in January, continuing a declining order book trend that has been evident over much of the past four years.

Germany helps offset renewed downturn in France

Within the eurozone, growth accelerated in Germany to a three-month high, fueled by a faster service sector expansion and a marginal return to growth for manufacturing.

In contrast, output fell in France for the first time in three months. Although output rose in the French manufacturing sector for the first time since last May, rising at the sharpest rate since February 2022, the French service sector reported lower activity again after two months of growth.

The rest of the region as a whole saw output rise but at the weakest pace since September. Slower service sector growth was accompanied by a second successive monthly dip in manufacturing output.

Future optimism hits 20-month high

Eurozone companies' expectations of output over the coming year suggest that growth could accelerate further. Future optimism rose to its highest since May 2024, hitting a 20-month high in the service sector and a near-four-year high in manufacturing.

Future output expectations in Germany climbed to the highest since February 2022 and hit a 16-month high in France, in both cases buoyed in particular by improved sentiment in the service sector. However, sentiment slipped to a five-month low in the rest of the single currency area.

Higher inflation as German wages rise

The rate of inflation in output prices meanwhile jumped to its highest since April 2024, the PMI's selling price gauge rising to a level broadly consistent with inflation running above the ECB's target of 2%. An increased rate of services inflation drove the upturn, as manufacturing prices fell slightly again.

However, the increase was largely driven by a spike in prices in Germany, largely reflecting the introduction of a markedly higher minimum wage at the start of January. In contrast, selling prices were unchanged in France, albeit with some upward pressure also noted across the rest of the eurozone as a whole.

Germany job losses key to eurozone employment malaise

Germany's higher minimum wage also appears to have affected employment. Across the eurozone, employment levels were scaled back, ending a three-month run of jobs growth. Although marginal, the reduction in workforce numbers was the most marked for almost a year. However, the decline reflected the steepest drop in payrolls numbers in Germany since June 2020, in the early days of the pandemic, with a drop in hiring likely linked to the 8.4% rise in the minimum wage.

There was better news on the labour market elsewhere, with marginal job gains reported in France accompanied by an upturn in jobs growth across the rest of the eurozone to its highest snice last July.

Access the press release here.

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence

Tel: +44 207 260 2329

chris.williamson@spglobal.com

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

]]>http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/eurozone-flash-pmi-sees-steady-growth-and-resurgent-optimism-at-start-of-2026-Jan26.html~/marketintelligence/en/mi/research-analysis/eurozone-flash-pmi-sees-steady-growth-and-resurgent-optimism-at-start-of-2026-Jan26.htmlChris Williamson PMIPurchasing Managers’ Index (PMI)http://prod.azure.ihsmarkit.com/marketintelligence/en/mi/research-analysis/eurozone-flash-pmi-sees-steady-growth-and-resurgent-optimism-at-start-of-2026-Jan26.htmlFri, 23 Jan 2026 11:56:33UK businesses kicked up a gear in January, showing encouraging resilience in the face of recent geopolitical tensions. Companies are reporting higher demand, both from home and export markets, which has driven output growth to the fastest since April 2024. Firms are also reporting the greatest optimism about the business outlook since before the 2024 Autumn Budget.

The January flash PMI is up to a level indicative of a robust quarterly GDP growth approaching 0.4%.

While growth continues to be driven by the service sector, and in particular financial services and tech, the manufacturing sector is also continuing to report a gathering recovery aided by resurgent demand, with goods exports notably rising for the first time in four years.

The good news was tempered, however, by the upturn in order books failing to stem a steep loss of jobs, which companies commonly blamed on the need to reduce high costs. These cost pressures were again often linked to government policies relating to higher National Insurance contributions and the Minimum Wage, and led to an especially steep further drop in hospitality jobs.

High staffing costs were also widely reported as a key cause of higher selling prices, hinting at an intensification of price pressures at a level above the Bank of England target.

Economy picks up speed

UK businesses are starting 2026 with the fastest output growth since April 2024.The PMI headline Composite PMI Output Index rose from 51.4 in December to 53.9, a 21-month high and one of the best readings since the 2022 rebound in business activity after the COVID-19 pandemic. The current PMI is broadly consistent with GDP growing at a near 0.4% quarterly rate in January, representing a marked improvement on the modest 0.1% gain signalled for the fourth quarter as a whole.

New orders growth also ticked higher, reaching the fastest since October 2024, boosted in part by the largest (albeit still modest) rise in exports since July 2024.

January's upturn was led by the service sector, where business activity growth jumped higher to reach the strongest since April 2024 amid improved inflows of new business. Financial services and tech companies again reported the strongest expansions.

However, the upturn also reflected a further improvement in manufacturing sector performance. Factory output rose for a fourth successive month in January, reviving after a near-year of continual decline, rising at the second-steepest rate since September 2024.

Even more encouraging for the goods-producing sector was a jump in new orders, which posted the largest monthly gain for nearly four years. New export orders for manufactured goods rose for the first time in four years, growing at a rate not seen since August 2021.

Greater optimism

Higher activity levels and rising inflows of new business helped drive an improvement in business expectations about growth over the coming year to the highest since September 2024, after which the policies announced in that year's Autumn Budget dampened the business mood. Optimism regarding future output rose to its highest for over a year in both manufacturing and services.

The improving order book situation also helped stabilize firms' backlogs of work, which showed only a marginal decline for a second successive month in January. This contrasts with a period of steeply declining backlogs of work seen over the prior two years.

Ongoing job cuts

The revival of business optimism and upturn in order books failed to generate more jobs, however, with employment falling sharply again in January. Net job losses have now been recorded in each month since October 2024, following the employer tax rises and other increased staffing cost measures announced in the Autumn Budget of that year.

January's decline in jobs was again linked to these higher staff costs, albeit often reflecting the non-replacement of leavers rather than redundancies, and was one of the steepest reductions recorded over the past 16 months. Increased job losses were reported in both manufacturing and services, broadly indicative of around 30,000 jobs being lost in total during the month when compared with official employment statistics.

By far the steepest loss of jobs was reported in the hospitality sector, such as hotels and restaurants, though a net rise in jobs was reported in tech and financial service firms.

Inflation revives

Beside the loss of jobs, a second negative from the January flash PMI survey came from the prices data. Average prices charged for goods and services rose at the fastest rate for five months, further suggesting that inflationary pressures have revived since sliding to a near-five-year low back in November. Although selling price inflation for goods remained only modest, service sector inflation picked up to a nine-month high, often blamed on higher staffing costs linked to Budget-related policies. Although average input price inflation held steady in January, it remained elevated and the highest since last May.

Comparisons with official inflation data suggest that the PMI survey's selling price gauge is broadly indicative of consumer price inflation running at around 3% into the second half of 2026, and therefore above the Bank of England's 2% target, albeit with some downside potential for inflation in the near-term.

Rate cuts on hold

The flash PMI data for January follow a further cut to interest rates by the Bank of England's Monetary Policy Committee in December, which took the Bank Rate down to a three-year low of 3.75%. However, the stronger upturn in output and relatively elevated price pressures hint at rates being held steady in the short-term as policymakers assess the outlooks for prices and growth. One concern will be the ongoing drop in employment, which will add to calls for more stimulus from some rate setters and in our opinion leaves the door open to further rate cuts in 2026 if the inflation trend permits.

Read the press release here.

© 2026, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.