What November PMIs Say

Monthly purchasing managers’ indexes (PMIs) are among the timeliest economic indicators. While not perfect reflections of health, these surveys presently show business activity expanding broadly worldwide. And although backward looking for stocks, we think they help round out the economic picture stocks have been pricing in.

Exhibit 1 rounds up PMIs from major developed nations worldwide. As shown, anyone rattled by America’s data dearth during the government shutdown can take heart: November US PMIs continued registering solid growth in the vast services sector, which represents 73% of GDP.^[i] S&P Global’s US services PMI remained comfortably above 50—signaling most firms surveyed see expansion—despite a slight dip to 54.1.

Exhibit 1: Global PMIs Show Broad—but Not Universal—Expansion

Source: FactSet, as of 12/3/2025. All figures are S&P Global PMIs except the Institute for Supply Management’s US figures.

Separately, the older Institute for Supply Management (ISM) services PMI rose a couple notches in November, but to a lower 52.6 level. New orders slipped -3.3 points but remained expansionary at 52.9. So not only are most services firms—the bulk of the US economy—growing, but orders are too, and today’s orders are tomorrow’s output. However, the employment subindex was sub-50 again, showing contraction for the sixth month straight, although November’s result was the highest of those six. Firms still seem reluctant to hire, in part due to lingering effects from “the government shutdown and customs impacts related to changing tariffs.”^[ii] But that is a well-worn, backward-looking view at this point and none too relevant for forward-looking markets.

Manufacturing—about 16% of GDP—was more of a mixed bag.^[iii] While S&P Global’s US manufacturing PMI showed expansion, ISM’s fell further into contraction at 48.2. Explaining the apparent discrepancy: S&P Global’s larger panel size (approximately 1,200 firms) encompasses smaller and domestically focused firms while ISM draws from its own members (around 800), which tend to be larger and cluster in traditional heavy industries with more potential tariff exposure.^[iv] Stocks, though, spied this divergence long ago. And regardless of either manufacturing PMI read, the broad picture indicates overall growth.

Globally, similar trends hold. Take France. Though its manufacturing PMI contracted further in November, its services PMI jumped 3.4 points, topping 50 for the first time since August 2024, which also brought the composite reading into expansion. While S&P Global’s comments about the one-month improvement seemed tentative, encouragingly, “a fresh increase in new business inflows spurred activity levels higher.”^[v] And with new orders driving growth: “Expectations of a rise in client numbers, new product launches and plans to increase headcounts were given as reasons to be positive towards the outlook.” Notably, this sentiment improvement came even as France’s budget crisis dragged on, showing businesses are starting to move on.

Besides, even with France’s composite PMI sub-50 through October, its GDP has grown—and accelerated—every quarter this year. Once more, how many firms are growing doesn’t necessarily equate to how much the overall economy is. The bigger picture matters more to stocks and the MSCI France Index’s 12.1% year-to-date return in euros and 26.3% in dollars is leading the MSCI World Index.^[vi] Markets are looking further ahead, and the growth they pre-priced appears to be following suit. The data just confirm the path French stocks already forged. By the same token, economic and market cycles tend to be global, and global factors swamp local, which is why the story is similar for the rest of the eurozone, the UK and Japan.

Now, improvement isn’t uniform. Manufacturing continues struggling, with all PMIs abroad in the red except the UK’s, which eked out a 50.2 in November after 13 straight contractionary reads. But most of November’s measures are so close to 50 that they cannot determine conclusively whether actual output fell. Indeed, that seems to be the case in Japan for September and October, at least, with month-over-month manufacturing output rising despite sub-50 manufacturing PMIs. We shall see about November.

Regardless, though, that manufacturing is in a global soft patch isn’t new news. As Exhibit 2 shows, industrial production has been flat to lower for years after an initial surge in goods demand during the COVID lockdowns. In some ways, it appears as though locking economies down—which hammered services firms—pulled forward demand for goods, leaving a pothole in its wake.

Exhibit 2: Industrial Production Broadly Flat Across Developed World

Source: FactSet, as of 12/3/2025. US, UK and eurozone industrial production, January 2020 – September 2025, Japan industrial production, January 2020 – October 2025.

But like in America, services make up a far larger share of developed economies abroad—and this dominant sector is rising across the board. Even French and UK services reads, the narrowest growth of the lot, may not be a harbinger of weakness ahead. Both nations endured bruising budget battles the past few months, which could have weighed on sentiment and activity. For example, as S&P Global’s report describes its UK respondents: “A number of firms noted that uncertainty ahead of the Budget had resulted in delayed investment decisions and cautious spending patterns.”[vii] But with that in the rearview now, uncertainty seems set to fade. That may suggest even these slightly expansionary reads could see improvement ahead.

So overall, with services expanding and largely faring fine globally, Q4 growth—and beyond—looks set to continue.