Global PMIs: Stockpiling continued in September – Standard Chartered

Composite PMIs show moderating economic activity, following August’s 14-month high. Manufacturing remains supported by tariff front-loading; global supply, price pressures are contained. Optimism about the year ahead improved, despite sluggish momentum from goods trade, Standard Chartered's Research Analyst Ethan Lester reports.

Business optimism undeterred by trade headwinds

"JP Morgan Global PMIs point to a small m/m deceleration in world economic activity in September, extending a 32-month growth streak, though growth has stayed below the long-run (1998-) average since Q2-2024. The index for both manufacturing and services PMIs dropped 0.5pts m/m; continued outperformance in financial and consumer services provided a robust floor for growth. Despite the economic expansion, global employment levels have been largely flat in recent quarters."

"Global manufacturing remained supported by finished goods stockpiling, given the looming threat of sectoral tariffs, and as firms utilised the ‘savings clause’ on reciprocal tariffs; US inventories growth exceeded new orders growth for the first time YTD. Global manufacturing supply chains lengthened for a 16th consecutive month, but price pressures or supply shortages remained isolated to a few goods (electrical items, transport and semiconductors). Global goods prices are in line with long-run trend growth; in the US, output prices decelerated much faster than input prices amid reports of excess stock."

"Future business optimism has fully recovered from post-Liberation Day lows in April, partly reflected in subdued gauges of financial risk and despite elevated gauges of global economic uncertainty. Global new export orders fell for the sixth month running, dragged down by goods rather than services, which accelerated for the first time in six months."