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Global economic growth accelerated sharply in April to reach an
11-year high, according to the latest PMI surveys, and further
robust growth looks likely in the coming months as more economies
open up from covid lockdowns.
At 56.3, up from 54.8 in March, the JPMorgan Global PMI™
(compiled by IHS Markit) struck its highest since April 2010, and
not far off the highest for 14 years. The latest expansion took the
recent run of growth into its tenth month as many economies around
the world continued to recover from COVID-19 downturns.
The progress of the recovery from the virus was underscored by
the global service sector reporting faster growth than
manufacturing for the first time since the pandemic began,
achieving its strongest upturn in business activity since July
2007.
The outperformance of the service sector, which has lagged the
manufacturing sector's revival due to strict controls on social
distancing and travel, coincided with COVID-related restrictions
easing globally to the lowest since last October. IHS Markit's
Global COVID-19 Containment Index fell from 40 in March to 36 in
April, its lowest since last October, as restrictions were eased on
average around the world for a third successive month.
* IHS Markit's COVID-19 Containment Index is based on a
basket of measures applied by governments to control the spread of
the pandemic, such as non-essential business closures, school
closures and travel and mobility restrictions linked to social
distancing policies. As these measures are tightened, the index
rises towards 100 and a relaxation of measures causes the index to
fall towards zero.
Encouragingly, the COVID-19 Containment Index is set to fall
further to 29 in May and 22 in June, according to official
government roadmaps, as efforts to fight the pandemic allow the
further reopening of economies, albeit with some exceptions,
notably India and Brazil.
The easing of containment measures should facilitate faster
economic growth in many economies, especially those such as the
eurozone, where vaccine progress has picked up markedly in recent
weeks and service sector growth in particular has been relatively
subdued.
Of the 65 economies covered by IHS Markit's COVID-19 Containment
Index, the biggest lockdown easings in May are scheduled for
European countries. Ranked by the change in the Containment Index
between April and May, the 31 countries seeing the biggest lockdown
easings are all located in Europe (including eastern Europe).
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.
