The global economy expanded for a twentieth straight month in February, according to the JPMorgan (NYSE:JPM) Global PMI™ (compiled by IHS Markit), with the rate of expansion accelerating from January's 18-month low as the COVID-19 Omicron wave showed signs of easing.
Both manufacturing and services growth improved in February. Services led the rebound with the strongest overall rate of expansion being in businesses services, followed by consumer services. Developed world output growth surpassed that of emerging markets, once again underpinned by services activity expansion. Fewer restrictions across Western economies such as the US, UK and eurozone supported the recovery in developed market output growth.
On manufacturing performance, global manufacturing growth picked up from the one-and-a-half year low in January although the overall rate of expansion continued to be constrained by supply chain delays and manpower shortages. Prior to the eruption of the Ukraine crisis in late February, the PMI data also reflected persistent inflationary pressures faced by firms. These pressures may well be exacerbated by the latest Ukraine crisis through multiple channels - such as upon energy prices, supply chain disruptions, the building of safety stocks and confidence - which we will be closely watching with the March PMI figures.
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