Global manufacturing activity accelerates in Jan 2026: Report

Manufacturing output growth was underpinned by the strongest rise in new work for almost a year, although the pace of expansion remained modest. There were also early signs of stabilisation in international trade, as new export orders declined only marginally and at the weakest rate seen during the ongoing ten-month downturn, S&P Global said in a press release.

Regionally, output growth was strongest in India, the United States and the ASEAN economies, led by Vietnam. US manufacturing growth was the joint-best since April 2022, while ASEAN output rose at its joint-fastest pace since April 2023. India continued to record robust expansion in line with its recent growth trend. Japan and Taiwan saw output rise to 45- and 11-month highs respectively, while South Korea posted its strongest upturn in 17 months. Mainland China recorded a modest but sustained improvement. In Europe, the UK expanded at its fastest pace in 16 months and the eurozone returned to growth, although Brazil remained a notable area of weakness.

By sector, production expanded across consumer, intermediate and investment goods, with consumer goods recording the fastest growth. New orders increased in the consumer and intermediate goods categories, signalling improving demand conditions in parts of the manufacturing landscape.

Business confidence strengthened further, reaching a ten-month high, although optimism remained below its long-run average amid ongoing geopolitical uncertainty. Sentiment was below historical norms in the US, mainland China, India, Japan and across ASEAN, while Europe reported relatively stronger confidence levels.

Employment conditions improved slightly, with manufacturing jobs rising for the first time in three months, albeit marginally. Employment gains in the intermediate and investment goods sectors offset continued job losses in consumer goods. Mainland China, the US and Japan reported higher staffing levels, while the euro area, on average, continued to see employment declines.

Cost pressures intensified sharply in January. Input costs and selling prices both rose at their fastest rates in nearly three years, reaching 36- and 35-month highs respectively. Supplier delivery times deteriorated for the twentieth consecutive month, partly reflecting increased purchasing activity and ongoing supply-side constraints.

“The new orders PMI rebounded to approach its recent highs, and the future output and employment indexes each ticked up on the month (albeit to still low levels). Accompanying these strong activity indicators was a 1.4-point move up in the output price PMI to its highest level since early 2023, though this jump was largely driven by the US,” said Maia Crook, global economist at JP Morgan.

Fibre2Fashion News Desk (SG)