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 PMI stymied by weak developed and emerging markets
•The Global PMI™, compiled by Markit for JPMorgan (NYSE:JPM), edged up to an eight-month high of 51.7 in September. However, the PMI points to annual global GDP growth (at market prices) of just less than 2% in Q3, which would be the slowest for just over three years. With new business growth ticking lower in September, employment also remained under pressure. The rate of global job creation is running at its slowest since early-2013.
•The downshifting of developed world growth, which started earlier in the year, showed only tentative signs of easing. Emerging market growth meanwhile waned slightly but remained well above the lows seen earlier in 2016 to suggest a modest easing in the drag on the global economy.
Global PMI & economic growth
Sources: IHS Markit, JPMorgan.
Developed & emerging market output
Source: IHS Markit.
Developed world struggles amid political uncertainty
•At 51.9, the developed world PMI rose to a five-month high, but the current level still looks weak when compared to the average of 54.5 seen in 2015. Companies in many countries reported business to have been subdued by political uncertainty. The survey data are signalling annual developed world GDP growth of less than 1% (at market prices).
•The UK saw the fastest rate of expansion of the four largest developed economies as businesses continued its muted bounce-back from the shock June ‘Brexit’ vote. Growth meanwhile picked up slightly in the US though likewise remained subdued by historical standards. In the eurozone, the pace of expansion slowed slightly from an already-disappointingly weak pace, while Japan remained in contraction.
Developed world PMI* & economic growth
Main developed markets
Sources: IHS Markit, CIPS, Nikkei.
* PMI shown above is a GDP weighted average of the survey output indices.
Mixed manufacturing trends
Global manufacturing remained stuck in a low gear in September amid weak trade flows. The latest PMI surveys are roughly consistent with global manufacturing output rising at a modest 2% annual pace; better than the stalling seen earlier in the year but still disappointingly modest.
The fastest rate of growth continued to be reported by the Philippines, outpacing all others by some margin. The UK moved into second place, enjoying the best export growth of all countries surveyed as the weak pound helped boost international competitiveness.
Sources: IHS Markit, JPMorgan, ISO, CIPS, NEVI, Nikkei, BME, Bank Austria, Investec, AERCE, Caixin, HPI, Thomson Reuters Datastream.
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