Week ahead: Global business activity data to offer clues on economic trajectory

Last week, global stock markets came under pressure as major central banks expressed concerns over growth and inflation, driven by Trump’s tariffs. Investors will now turn their attention to manufacturing and services Purchasing Managers’ Indexes (PMIs) for insights into the economic trajectory. Additionally, the EU summit on Ukraine aid and the bloc’s role in peace negotiations will be a key event for European equities.

Inflation data from Australia, the UK, Japan, and several European economies will also be closely watched as the global trade war intensifies.

A series of flash manufacturing and services PMIs for March from major economies will be released by S&P Global on Monday. These indices provide key insights into economic health by measuring activity across sectors based on new orders, employment, and business confidence. A reading above 50 signals expansion, while a figure below 50 suggests contraction.

Since Russia’s invasion of Ukraine in 2022, surging energy prices have fuelled inflation and led to rapidly rising interest rates, significantly slowing global manufacturing activity.

The EU has been particularly impacted by macroeconomic headwinds, with its manufacturing sector in decline since mid-2022.

In February, the eurozone’s manufacturing PMI improved to 47.6 from 46.6 in January, marking the mildest contraction since early 2023. Germany, France, Italy, and Austria all recorded a slower pace of decline, while business confidence rose to a three-year high, likely due to falling interest rates and China’s economic recovery.

However, Trump’s recently imposed 25% tariffs on steel and aluminium imports could place fresh pressure on the sector. This week, the focus will be on data from Germany and France, where