Developed world powers steady global upturn and jobs growth at start of Q3
The following is an extract from IHS Markit's monthly PMI overview presentation. For the full report please click on the link at the bottom of the article.
Global growth slows, but indicators hint at brighter outlook
The global economy saw growth ease slightly for a second successive month in July but nevertheless enjoyed a solid start to Q3, according to PMI data. The headline JPMorgan PMI", compiled by IHS Markit, slipped from 53.7 in June to 53.5 in July, its lowest since December. While the PMI hints at a mild slowing in the rate of economic growth, the level remains consistent with global GDP rising at an annual rate of just under 2.5%, only slightly below that seen on average over the course of the first half of 2017.
Some of the survey sub-indices suggest that growth could pick up again in August. Inflows of new business showed the largest rise since January and one of the biggest gains seen for almost three years, and employment growth picked up to reach a 37-month high.
Global PMI* & economic growth
Sources: IHS Markit, JPMorgan.
Global employment and new business
Source: IHS Markit.
* PMI shown above is a GDP weighted average of the survey output indices.
Developed world job creation hits near-ten year high
Beneath the headline numbers, the data showed growth again being driven by the developed world. The Developed Markets PMI edged down from 54.5 to 54.4, but continued to run at one of the highest levels seen over the past two years. The Emerging Markets PMI meanwhile fell from 51.5 to 51.4, its lowest since last September, indicating that the underperformance of the emerging markets relative to the developed world remained the widest since January 2016.
Future expectations dipped in both the developed and emerging markets, albeit merely down to a four-month low in the former while the latter saw sentiment drop to its weakest for one-and-a-half years. Employment trends also diverged, with emerging market payroll numbers falling slightly while jobs growth in the developed world rose to its highest since October 2007.
Chris Williamson | Chief Business Economist, IHS Markit
Tel: +44 20 7260 2329
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