Developed-market PMI improved, but manufacturing delivery times remain tight

Overview

This report tracks July 2026 global developed-market Flash PMI and related early business surveys. The core message is that overall activity in developed markets improved, with composite PMI, services PMI, and some forward-looking indicators moving higher; however, manufacturing suppliers' delivery times remain elevated, and input and output price PMIs are still high, indicating that supply-chain and inflation pressures have not been fully resolved.

Core views

Goldman Sachs believes that signals of economic activity in developed markets broadly improved in July: composite Flash PMI rose to 52.8, and both manufacturing and services remained in expansion territory; the manufacturing orders-to-inventory ratio and the services future activity subcomponent also improved. However, although manufacturing suppliers' delivery times eased slightly, they remain tight, and price subcomponents also show divergence in inflation pressure between manufacturing and services. Investors therefore still need to monitor both growth momentum and supply-chain inflation constraints.

Analysis framework

The report uses PMI and early business surveys as the main high-frequency indicators, breaking down developed markets overall, countries/regions, activity subcomponents, employment subcomponents, suppliers' delivery times, and price subcomponents, and uses a developed-market GDP-weighted approach to aggregate PMI performance across the US, euro area, UK, Australia, and Japan.

Methodology notes

• Macro High-Frequency TrackingPMI Activity Monitoring

  Observe economic activity, employment, supply chains, and price pressures through manufacturing, services, composite PMI, and their subcomponents.

  A PMI above 50 usually indicates expansion, while below 50 usually indicates contraction; suppliers' delivery times and price subcomponents can be used to observe supply bottlenecks and inflation pressures.

• Regional Aggregation MethodGDP-Weighted Developed-Market PMI

  DM is a GDP-weighted composite of the PMI indices of the US, euro area, UK, Australia, and Japan.

  This measure is used to observe overall developed-market trends while retaining divergence at the country and regional levels.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Developed-Market Equities

  Improved growth activity is usually supportive of earnings expectations and risk appetite.

  Strengths

  Composite PMI, services PMI, and forward-looking activity subcomponents improved.

  Weaknesses

  Price subcomponents remain elevated, which may restrain valuation expansion.

  Comparison

  US manufacturing PMI remains higher than the euro area's, but the US saw a marginal decline in July while the euro area saw marginal improvement.

  Risks

  Tight supply-chain delivery times and persistent inflation pressure may weaken expectations for policy easing.

• Developed-Market Rates

  Improved growth and sticky inflation may affect pricing of the rate-cut path.

  Strengths

  Improved signals from services and manufacturing activity reduce concerns about near-term growth downside.

  Weaknesses

  Input price and output price PMIs remain at relatively high levels.

  Comparison

  Manufacturing price subcomponents declined while services price subcomponents rose, showing structural divergence in inflation pressure.

  Risks

  If services prices and supply-chain pressures persist, room for lower rates may be limited.

Key data

• Developed-Market Composite Flash PMI52.8Up 1.6 points in July, reflecting improvement in both services and manufacturing.
• Developed-Market Services Flash PMI52.6Up 1.9 points in July.
• Developed-Market Manufacturing Flash PMI53.2Up 0.1 point in July.
• Euro Area Manufacturing Flash PMI52.0Up 0.6 point in July.
• US Manufacturing Flash PMI53.8Down 0.2 point in July.
• UK Services Flash PMI51.8Up 3.1 points in July.
• Japan Services Flash PMI51.9Down 0.3 point in July.
• Manufacturing Orders-to-Inventory Ratio1.10Up 0.03 in July, indicating improvement in forward-looking manufacturing subcomponents.
• Services Future Activity Subcomponent61.9Up 1.9 points in July.
• Developed-Market Average Manufacturing Suppliers' Delivery Times41.8Up 1.0 point in July, but still at a high level.
• Developed-Market Manufacturing Input Price PMI68.4Down 3.3 points in July.
• Developed-Market Services Input Price PMI62.4Up 0.4 point in July.
• Developed-Market Manufacturing Output Price PMI59.6Down 1.6 points in July.
• Developed-Market Services Output Price PMI56.6Up 0.6 point in July.

Impact & implications

For macro assets, the PMI improvement supports the view of short-term growth resilience in developed markets; however, suppliers' delivery times remain long and input and output price PMIs remain elevated, implying that the path of disinflation may not be linear, and expectations for policy rates and the pricing of risk assets may continue to be influenced by both growth and inflation signals.

Risks

• PMI is a survey-based indicator and may diverge from subsequent hard data.
• Manufacturing suppliers' delivery times remain close to historical highs, suggesting that supply-chain disruption risks have not been fully eliminated.
• Price PMIs remain elevated, and inflation stickiness may affect monetary policy expectations.
• PMI trends differ across countries and regions, so overall improvement in developed markets does not mean all economies are improving simultaneously.

What to watch

• Whether subsequent final PMI and hard data confirm the improvement in July Flash PMI.
• Divergence between manufacturing and services across the US, euro area, UK, Japan, and Australia.
• Whether suppliers' delivery times continue to ease, especially in developed markets outside the US.
• Whether manufacturing and services input price and output price PMIs decline further.
• Whether employment PMI and forward-looking activity subcomponents continue to improve.