Asia-Pacific Flash PMIs Show Strains Emerging From Mideast War

Published: 2026-04-23 02:16:42 ET SPGI

Published on 04/23/2026 at 02:16 am EDT

By Fabiana Negrin Ochoa and James Glynn

Gauges of manufacturing and services activity in Asia-Pacific showed that the Middle East war is starting to take a heavier toll on industries, despite pockets of resilience in major economies.

A trio of flash purchasing managers surveys compiled by S&P Global revealed the strain businesses in Australia, Japan, and India are feeling as the conflict drives up costs and disrupts supply chains.

Headline figures were positive across the three countries, coming in above the 50 mark separating expansion from contraction, but there were cracks in the data.

Australia's PMI composite output index returned to growth at 50.1 in April from 46.6 in March, indicating a stabilization of the private-sector economy.

The country's private sector showed resilience as companies navigate the challenges brought on by the war, said Eleanor Dennison, economist at S&P Global Market Intelligence.

But to understand how manufacturers are faring, "we must look beneath the positive headline index print as output, new orders, employment and stocks all fell at modest rates," she said.

The surveys indicate that manufacturing supply chains are being strained, while price pressures continue to mount.

In Japan, manufacturers signaled the steepest rise in output for over 12 years in April, but anecdotal evidence indicated that some raised output due to concerns over supply shortages caused by the war.

Supply-chain disruptions contributed to a much sharper rise in costs, and the most pronounced increase in average delivery times for manufacturers' inputs in nearly four years, said Annabel Fiddes at S&P Global Market Intelligence.

Meanwhile, Japan's services activity cooled as new export orders fell for the first time in five months, offsetting the manufacturing rebound to limit private-sector activity expansion to its softest pace in four months.

India's reading was perhaps the most encouraging, as companies cited tailwinds from capacity expansion, better demand conditions, and tech investment.

Manufacturing led the upturn in India, with the HSBC flash PMI composite output index rising to 58.3 in April from 57.0 in March.

"The survey indicated that firms are building buffer stocks to manage the uncertainties around the longevity of the supply-side shock," said Pranjul Bhandari, chief India economist at HSBC.

Business confidence across the three PMIs was shaken during the month, though companies in India were still relatively upbeat by historical standards.

Corporate sentiment in Australia stayed positive but hit its lowest in almost two-and-a-half years on concerns over the cost and demand environment.

In Japan, business confidence fell to the lowest since August 2020--in the depths of the Covid-19 pandemic--said Fiddes.

"The war in the Middle East was a key factor dampening optimism, with the current strong manufacturing performance unlikely to be sustained unless uncertainty is reduced and supply chains stabilize," she said.

Write to Fabiana Negrin Ochoa at [email protected]

(END) Dow Jones Newswires

04-23-26 0216ET