Global economy starts 2020 on ten-month high, awaiting coronavirus impact
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 PMI at ten-month high prior to coronavirus outbreak
Worldwide growth accelerated for a third consecutive month in January, according to the latest PMI surveys, registering the strongest monthly increase in output since last March. The JPMorgan Global PMI™ (compiled by IHS Markit) rose from 51.6 in December to 52.2, marking a further recovery from last October's low, when the PMI had slumped to its lowest since February 2016. Despite reaching a ten-month high, the latest reading is still modest by historical standards, comparable with global GDP rising at an annual rate of just over 2.5% (at market prices). The rise nevertheless hints that the global slowdown potentially bottomed-out late last year.
Other indicators of order books, jobs growth, global trade and business expectations likewise improved, adding to signs that the global economy was gaining momentum at the start of the year. However, short-term risks to the outlook have risen, especially as the vast majority of the January data were collected prior to the coronavirus outbreak, which poses a major threat to future output.
Chris Williamson, Chief Business Economist, IHS
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Purchasing Managers' Index™ (PMI™) data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.
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