This post was originally published on The Economic Times
Factories across the world faced soaring input costs and supply chain disruptions in March due to the Iran war as underlying tepid demand threatened to undermine the manufacturing sector‘s fragile recovery, surveys showed.
The conflict has disrupted global logistics networks, causing delivery delays, pushing up input price inflation and distorting headline growth measures.
Higher oil and energy prices led manufacturers to react and raise selling prices.
Headline PMI numbers – usually a sign of increased activity – were falsely elevated by the supply shock lengthening delivery times, said Chris Williamson, chief business economist at S&P Global.
That was the case for the headline euro zone reading. In Asia, many economies saw it fall, a sign surging fuel costs and heightening uncertainty from the Iran war were taking a toll.
Wednesday’s S&P Global euro zone Manufacturing Purchasing Managers’ Index (PMI) rose to 51.6 in March from February’s 50.8, higher than a preliminary estimate of 51.4.
A reading above 50.0 would normally indicate growth in activity. “While the uptick in the headline
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