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Global Manufacturing Picked Up in March—in Some Cases at Record Levels

There were definite signs of improvement in global manufacturing in March as demand grew and new orders increased.

However, the global pandemic was still leaving its mark around the globe in limiting expansion, and supply chain woes such as the bottleneck aftermath of the Suez Canal crisis put a damper on expectations.

United States

March Purchasing Manager’s Index (PMI) data from IHS Markit indicated the second-strongest improvement in the health of the U.S. manufacturing sector since data collection began in May 2007.

The overall expansion was supported by the steepest rise in new orders since June 2014, although production was reportedly held back by supply shortages. Supplier lead times lengthened to the greatest extent on record.

At the same time, inflationary pressures intensified, with cost burdens rising at the quickest rate for a decade. Firms partially passed on higher input costs to clients through the sharpest increase in charges in the survey’s history. The seasonally adjusted IHS Markit U.S. Manufacturing PMI posted 59.1 in March, up from 58.6 in February but broadly in line with the earlier released IHS estimate of 59.

Goods producers registered the fastest upturn in new business for almost seven years in March. Anecdotal evidence suggested the expansion was due to a broad-based strengthening of client demand. Some companies also reported stockpiling efforts among their customers amid soaring input prices.

While output rose for a ninth successive month, the faster rise in demand did not translate into sharper production growth as output was reportedly constrained by supply shortages and unprecedented extensions to lead times. Although still strong overall, the rate of expansion in output was the slowest since last October.

“March saw manufacturers struggle to cope with surging inflows of new orders,” Chris Williamson, chief business economist at IHS Markit, said. “Although output continued to rise at a solid pace, capacity is being severely strained by the combination of soaring demand and supply chain disruptions–supply chain delays and backlogs of uncompleted orders are growing at rates unprecedented in the survey’s 14-year history, meaning inventories of finished goods are falling at a steep rate.”

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Williamson said pricing power has risen as demand outstrips supply. Raw material prices are increasing at the sharpest rate for a decade and factory gate selling prices have risen to a degree not seen since at least 2007.

“The fastest rates of increase for both new orders and prices was reported among producers of consumer goods, as the arrival of stimulus checks…added fuel to a marked upswing in demand as the economy continued to pull out of the malaise caused by the pandemic,” he said. ““With business expectations becoming even more optimistic in March, further strong production growth looks likely in the second quarter, but the big question will be whether rising price pressures also become more entrenched.”


Canadian manufacturers ended the first quarter with a survey record improvement in overall business conditions. A substantial rise in new work boosted production volumes and stimulated job creation in March.

The surge in demand contributed to a strong rise in backlogs. However, material shortages and border restrictions linked to the coronavirus pandemic continued, which contributed to the greatest lengthening in lead times since April 2020.

The seasonally adjusted IHS Markit Canada Manufacturing PMI registered 58.5 in March, up considerably from 54.8 in February, to become the highest reading in over 10 years of data collection. Manufacturers reported the second-fastest rise in output levels since the series began, which was often linked to increased workloads and greater production capacity.

Survey respondents widely commented on greater demand from domestic and export markets. To cater for the surge in demand, manufacturers added to workforce numbers during the month, with the rate of job creation reaching a three-month high. Despite this, there were further signs that manufacturing companies were unable to keep up with rising workloads at the end of the quarter, with volumes of unfinished business increasing at a near survey-record pace.

“Canadian manufacturers ended the first quarter of 2021 on an upbeat note,” Shreeya Patel, economist at IHS Markit, said. “The growth was driven by stronger demand as COVID-19 restrictions continue to ease across the provinces. Turning to areas of concern, global supply chain pressures continued in March. Border restrictions and tighter COVID-19 measures in international markets continued to hinder the supply of inputs. As a result, firms have had to incur rising costs and production delays. That said, the more resilient demand environment has allowed firms to protect profit margins by raising selling prices.”


The Eurozone’s manufacturing economy performed strongly during March, with operating conditions improving to the greatest degree in nearly 24 years of data collection.

The PMI surged to 62.5, up from February’s 57.9 and indicative of a considerable strengthening of sector performance. Growth was broad-based across the region, with Germany and the Netherlands leading the way. Austria also performed exceptionally well, while Italy and France both recorded levels among the highest in their respective survey histories.

Underpinning the headline Eurozone PMI were record rises in both output and new orders in March. A general strengthening in demand, on the back of increasing confidence about future economic conditions, helped to drive the record increases in production and output.

“Eurozone manufacturing is booming, with production and order books growing at rates unprecedented in nearly 24 years of PMI survey history during March,” IHS’s Williamson said. “Although centered on Germany, which saw a particularly strong record expansion during the month, the improving trend is broad based across the region as factories benefit from rising domestic demand and resurgent export growth. “Driving the upturn has been a marked improvement in business confidence in recent months, with expectations of growth in the year ahead running at record highs in February and March. This has not only boosted spending but has also led to rising investment and restocking, as firms prepare for even stronger demand following the vaccine roll-out.”

“The picture is blighted, however, by record supply chain disruptions, which will likely be exacerbated further by delays arising from the Suez Canal blockage,” he added. “Prices are already rising at the fastest rate for a decade as demand outstrips supply, resulting in a sellers’ market for many goods.”


Brazil’s manufacturing sector recovery was interrupted in March, as a spike in coronavirus cases and the introduction of new restrictions reduced new orders. Subsequently, companies lowered production, trimmed employment and reassessed their forecasts for output over the coming year.

The results also highlighted severe supply-chain disruptions, which triggered a steep increase in input costs and delivery delays. To protect their margins, firms lifted their selling prices again. Owing to a sharp increase in supplier delivery times, the IHS Markit Brazil Manufacturing PMI remained above the 50 no-change mark in March, declining from 58.4 in February to a nine-month low of 52.8.

“The Brazilian manufacturing sector experienced a setback in March, with new orders and output dipping back into contraction due to a spike in COVID-19 cases and the introduction of new controls aimed at curbing the spread of the disease,” Pollyanna De Lima, Economics Associate Director at IHS Markit, said. “Supply-chain constraints remained a key feature of the PMI survey. Average lead times lengthened to one of the greatest extents we’ve seen amid the shipping crisis and raw material shortages.”


The upturn in the U.K. manufacturing sector gained momentum at the end of the third quarter. March saw the fastest output growth since late-2020, as inflows of new business from domestic and overseas markets strengthened.

The sector remained beset by severe supply chain and logistic issues, however, leading to delivery delays from suppliers and disruption to production and distribution schedules.

The IHS Markit/CIPS PMI rose to a decade-high of 58.9 in March, its best outcome since February 2011. The PMI level was supported by improved growth of output, new orders and employment along with increased supplier lead times. A slower decrease in stocks of purchases also had a positive impact on the latest reading compared to one month ago.

Consumer goods production returned to expansion following back-to-back contractions. Higher output was linked to improved new order intakes, the vaccine roll-out and preparations for the planned loosening of lockdown restrictions.

Companies reported improved demand from domestic and overseas clients, rising business confidence and customers ordering early to guard against potential price rises and further supply-chain disruption. The ongoing rebound in domestic and global economic conditions underpinned increased optimism and job creation at U.K. factories.

“Signs of Spring have appeared in the U.K. manufacturing sector,” Rob Dobson, director at IHS Markit, said. “The domestic market remained the prime source of new orders, as companies reported that the vaccine roll-out and clients’ preparations for the loosening of lockdown restrictions underpinned the expansion. Many expect this process to be supportive during the year ahead as well, raising business optimism and jobs growth to their highest levels for seven years.”


Chinese manufacturing companies signaled a further improvement in operating conditions in March. Production and new orders continued to expand at mild rates, with new export business returned to growth.

At the same time, inflationary pressures intensified, with input costs and output charges rising at steeper rates. At 50.6 in March, the PMI was down from 50.9 in February, however, indicating a marginal rate of improvement, was the softest seen in the current 11-month period of expansion.

Chinese manufacturers increased production during March for the 13th straight month, but the rate of growth edged down to an 11-month low and remained modest overall. Firms frequently mentioned that a further recovery from the pandemic and rising customer orders had supported the latest upturn.

Underlying data suggested that a softening of domestic demand was largely offset by increased foreign sales, which rose for the first time in three months. The sustained upturn in new orders led to renewed pressure on capacities, with backlogs of work rising modestly after a marginal drop in February.

“Overall, the manufacturing sector continued to recover in March, but the momentum of both supply and demand weakened,” Wang Zhe, senior economist at Caixin Insight Group, said. “Manufacturing enterprises were still confident that the economy will continue to recover and that the pandemic will be brought under control, with the gauge for future output expectations exceeding the long-term average. We should pay attention to inflation in [the] future as the gauges for input and output prices have been rising for several months. The growing inflationary pressure limits the room for future policies and is not a good thing for sustaining an economic recovery in the post-epidemic period.”


Growth gathered pace in the Vietnamese manufacturing sector at the end of the first quarter. Marked increases in output, new orders and exports were recorded, leading to stronger rises in employment and purchasing activity. Meanwhile, business confidence surged to a 20-month high.

On a less positive note, disruption to supply chains continued to affect the sector and strengthened inflationary pressures. Input costs and output prices rose at the fastest rates in just over three and four years. respectively. The Vietnam Manufacturing PMI rose to 53.6 in March, up from 51.6 in February and signaling a solid improvement in the health of the manufacturing sector.

The rate of production growth hit a 20-month high. Output was up across main sectors, with consumer goods firms leading the expansion.