The following is an extract from Markit's monthly economic overview. For the full report please click the link at the bottom of the article.
Global economic growth lost a little momentum in February, according to PMI survey data, but remained robust.The JPMorgan (NYSE:JPM) Global PMI™, compiled by Markit, fell for the first time in six months, down from January’s 22-month high of 53.9 to a three-month low of 53.5.
Global PMI* & economic growth
Sources: IHS Markit, JPMorgan
Despite the slight slowing, the survey data are consistent with global GDP rising at an annual rate of 2.5% in the first quarter, assuming no major change in momentum during March. Emerging market growth edged up to a 29-month high, but continued to under perform relative to the rich world, despite the latter recording the weakest expansion for three months.
Developed & emerging market output
* PMI shown above is a GDP weighted average of the survey output indices
Source: IHS Markit.
Eurozone leads developed world expansion
Developed world growth was led by the eurozone, where growth hit a near six-year high. Growth meanwhile slowed in the U.S., UK and Japan, albeit remaining robust in all cases by recent standards to suggest broad-based expansions among the four largest rich-world economies.
Main developed markets*
Source: CIPS, IHS Markit, Nikkei.
Russia continued to lead the emerging market upturn, recording the highest PMI of the BRIC nations for the fourth successive month. Growth accelerated in China, and India returned to expansion for the first time since October, suggesting the economy is recovering from the disruptions of demonetisation. Brazil remained firmly in decline, though the contraction was the shallowest for almost two years.
BRIC nations*
* PMI shown above is a GDP weighted average of the survey output indices.
Sources: IHS Markit, Caixin, Nikkei.
Global business optimism wanes, costs rise sharply
Other global indicators also pulled back from highs at the start of the year but remain consistent with steady growth of business activity. Business optimism about future output dipped from January’s 20-month high. This was partly due to reduce expectations in the developed world, though overall optimism remained at the second-highest level for over 1½ years. Growth in new business likewise eased back from January’s 28-month record.
Future expectations & new orders
Source: IHS Markit, JPMorgan.
While manufacturers continued to signal longer delivery times, the surveys remain indicative of only mild inflationary pressures in global supply chains. Prices paid for manufacturing inputs nevertheless continued to rise sharply due to higher energy and commodity costs, with the rate of input price inflation holding close to January’s 5½ year peak.
Global inflation pressures
Source: IHS Markit, JPMorgan.
Disclaimer: The intellectual property rights to these data provided herein are owned by or licensed to Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon.
In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are either registered trademarks of Markit Economics Limited or licensed to Markit Economics Limited. Markit is a registered trade mark of Markit Group Limited.