Global momentum in manufacturing
April PMIs (Purchasing Managers’ Indices) point to a meaningful improvement in global manufacturing momentum, with the U.S., Eurozone and Japan all posting stronger-than-expected and firmly expansionary results. The breadth of the rebound suggests improving global demand, supporting a constructive outlook for growth despite ongoing geopolitical tensions.
3 mins Reading time
Published on 30 April 2026
In April, the U.S. manufacturing PMI rose more than expected to 54.0, its highest level in four years and a firmly expansionary reading. The PMI tracks changes in business conditions across the manufacturing sector, making it a useful gauge of the sector’s overall health and direction. Because purchasing managers tend to see shifts in supply, demand and production plans early, the index is considered a leading indicator of economic activity.
However, the improvement was not confined to the U.S. In the Eurozone, the manufacturing PMI also rose more than expected to 52.2, its strongest reading since May 2022. Japan’s manufacturing PMI likewise advanced to 54.9, the highest level since January 2022. Taken together, these readings suggest that manufacturing activity is strengthening across several major economies at the same time.
That breadth matters. Manufacturing recoveries that occur simultaneously across regions tend to be more durable because they reflect not just local factors, but improving global demand. We view the latest PMI data as constructive. These readings suggest that, despite the ongoing war in the Middle East, momentum in the goods-producing side of these economies is building rather than fading.
927153 Exp : 30 April 2027
YOU MIGHT ALSO LIKE
Higher inflation has been a dominant theme of the current decade. In addition to price shocks, it is being shaped by secular investment trends in infrastructure, defense spending, onshoring and the ongoing AI buildout. These structural changes reinforce the case for looking beyond traditional 60/40 portfolios to include real assets as a source of diversification and return potential in portfolios.
Inflation appears to have transitioned from its pre-Covid average of 2% to a stickier point closer to 3%, and we do not expect a near-term return to prior levels. In this environment, we believe real assets, such as commodities, infrastructure and REITs, can provide inflation protection, diversification and return potential.
As the S&P 500 approaches all-time highs, there are renewed concerns among investors about elevated valuations. However, historically strong profitability and expected earnings growth appear to support current pricing. In addition, the current S&P 500 price-to-earnings (P/E) ratio is roughly equal to the average since Covid. As a result, we do not view U.S. equities as being in bubble territory and we remain constructive on the asset class.
Stocks, as measured by the S&P 500, are up over 13% through early August. The solid gains have been fueled by a resilient economy, steady consumer spending, optimism around artificial intelligence and better-than-expected earnings growth. Still, some investors worry the advance may be too concentrated in technology and that AI-capex monetization may fall short of expectations. A closer look suggests that it is not just tech moving the market higher.
