Good news for suppliers?

Author: Marek Szymański
. Wskaźnik PMI (Purchasing Managers Index) bada nastroje i zbiera opinie menedżerów logistyki

The just-released value of the Eurozone Manufacturing PMI Index brings hope for a recovery in supply chains. According to data from S&P Global Market Intelligence, the value of the index rose by 1.1% in November this year compared to the previous month.

This is also the highest PMI in six months. However, this does not change the fact that the index remains abnormally low, as it currently stands at just 44.2 points. The Purchasing Managers Index (PMI) surveys the sentiment and collects the opinions of logistics managers of various industries and is one of the most reliable sources on the economic situation. PMI values below 50 points indicate declining economic growth leading to recession.

November’s increase indicates greater optimism among representatives of the manufacturing sector. Although industrial production, the value of new orders, esports and purchasing levels continue to decline, the rate of decline has clearly slowed. In the case of production and new orders, the declines were the smallest in six months. The liquidity of supply is also good news, as the process of disposing of inventories made by manufacturers during successive waves of pandemics continues. 

Does the marked upturn in sentiment in the manufacturing sector signal a sustained recovery in the European Union economies and therefore more movement in supply chains? This is what the PMI indications will show in the next two to three months. So far, of the eight eurozone countries analysed, only Greece and Ireland have reached the 50-point ceiling (50.9 and 50 points respectively), with Austria, France and Germany recording the weakest readings. Meanwhile, it is the sentiment in the latter two markets that is crucial for the EU economy as a whole. 

Experts point out that an impressive increase in the PMI Index was recorded in Poland. In October this year, the index value was 44.5%, and in November it was already 48.7%. As S&P Global analysts note, in the case of Poland, “the industrial sector has reached a turning point”. – November’s data gave the clearest signal yet that the long slowdown in Polish industry is coming to an end, comments Trevor Balchin, economic director at S&P Global Market Intelligence.