Global Manufacturing Slowdown Intensifies Amid Iran War Concerns

Global manufacturing activity slowed in March, with multiple Asian and European economies reporting weakened growth, largely attributed to rising costs and supply chain disruptions stemming from the Iran war. PMIs across the region, including China, Japan, Indonesia, Vietnam, Germany, France, Taiwan, and South Korea (an outlier with strong expansion), indicate a broad-based deceleration. Surging energy and raw material prices, exacerbated by the conflict and a weak yen in Japan, are driving inflationary pressures and impacting business confidence. While some companies are attempting to pass costs onto consumers, leading to increased factory gate prices, overall business expectations for the next 12 months have declined. Several reports highlight increased supplier delivery times and growing backlogs of work. Despite the downturn, optimism remains in sectors like semiconductors and AI, but is tempered by geopolitical uncertainty. Employment trends are mixed, with some countries reporting declines while others continue to hire to address existing shortages.