ABN AMRO's Senior Economist Arjen van Dijkhuizen highlights that global manufacturing PMI slipped from 51.8 in February to 51.3 in March, largely linked to the Iran conflict. Emerging markets, including China and India, led the deterioration, while developed markets appeared stronger due to longer delivery times. He notes re-emerging supply bottlenecks, higher input and output prices, and rising global inflationary pressures.

Iran conflict revives supply bottlenecks

"After having risen to a 44-month high of 51.8 in February, the global manufacturing PMI dropped back to 51.3 in March."

"This seems to a large extent related to the escalation of the conflict between US/Israel and Iran, which started on 28 February."

"The lengthening of delivery times is just one of the indications of supply disturbances stemming from the Iran conflict."

"Not surprisingly, our global supply bottlenecks index has risen back to ‘dominant supply bottlenecks/excess demand’ territory."

"All in all, the developments in global manufacturing confirm a picture of rising inflationary pressures, which fits with the recent upward adjustment of our inflation forecasts for the eurozone, the Netherlands, the US and China."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)