J.P. Morgan: Strong PMIs offered further encouragement about the recovery

J.P. Morgan: Strong PMIs offered further encouragement about the recovery

March 29, 2021

Equity
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Flash Purchasing Managers' Index (PMI) data for March delivered strong composite prints across the US, UK and eurozone. The services-led jump in the UK was particularly notable, while activity ticked up in the euro area and held at elevated levels across the Atlantic.

Business expectations of future output are very healthy across the board. The employment component is also encouraging, now sitting above 50 for manufacturing and services in each of the three regions and pointing to a potential acceleration in hiring ahead. The surge in input prices - partly driven by supply chain bottlenecks – was a little more concerning. Base effects are already set to push inflation higher over the coming months, and persistent supply constraints risk adding additional upward pressure. Central banks have committed to "look through" temporary spikes in inflation, but their resolve is set to be tested as we move into the spring.

Markit composite PMI, index level

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Source: Bloomberg, Markit, J.P. Morgan Asset Management. Data as of 25 March 2021.

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