Key facts
- Euro zone factory output grew at its fastest pace in nearly four-and-a-half years in July.
- Euro zone PMI rose to 51.9 in July.
- China's factory growth slowed to a four-month low in July.
- India's manufacturing sector expanded at its slowest pace in nearly five years in July.
- Germany's manufacturing sector expanded in July at its strongest pace since May 2022.
- Poland's manufacturing downturn eased in July.
- Poland's manufacturing employment rose in July.
- World Bank maintained its 2026 Philippine growth forecast at 3.7%.
- World Bank projects Philippine growth to rebound to 5.2% in 2027.
Global manufacturing activity presented a varied picture in July, with some regions experiencing robust output growth while others faced decelerating expansion and weak demand. The Euro zone's factory output surged at its fastest pace in nearly four-and-a-half years. This acceleration was driven by companies working through backlogs of unfinished work, rather than an increase in new business. The Purchasing Managers' Index (PMI) for the region rose to 51.9, a level indicating expansion, but new orders saw only marginal growth, suggesting underlying demand remains subdued.
In Asia, China's factory growth decelerated to its slowest pace in four months. This slowdown occurred despite a rebound in export orders, indicating that domestic demand remains weak. New orders for Chinese manufacturers weakened in July. Meanwhile, India's manufacturing sector experienced its slowest expansion in nearly five years. This deceleration was attributed to soft demand and a reduction in job creation within the sector.
Within Europe, Germany's manufacturing sector expanded in July at its strongest pace since May 2022. This growth was fueled by faster output and an increase in export sales. In contrast, Poland's manufacturing sector saw its downturn ease. While output and orders continued to decline, the pace of contraction slowed. Notably, employment in Poland's manufacturing sector rose during July.
Separately, the World Bank maintained its 2026 growth forecast for the Philippines at 3.7%. This projection is based on continued weak investment and consumption. The bank anticipates a slower economic recovery for the Philippines next year, with growth expected to rebound to 5.2% in 2027.