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Global growth near two-year low as trade flows stagnate
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 signals one of weakest expansions for two years
Global economic growth edged lower in August. The headline JPMorgan Global Composite PMI, compiled by IHS Markit, fell from 53.7 in July to 53.4, its second-lowest level since the end of 2016. However, the latest reading is only marginally below the 53.8 average seen in 2017 and remains indicative of global GDP rising at a solid annual rate of 2.5% (at market exchange rates). Future expectations improved slightly, albeit from a subdued level.
Manufacturing output growth continued to run at one of the weakest rates seen over the past two years, stymied by a further near-stagnation of global trade flows. Global export orders barely rose for a fourth consecutive month. In a sign of weakness spreading beyond the export sector, August saw worldwide service sector business activity grow at the slowest pace for five months, to also register one of the softest performances seen over the past two years.
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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