The rate of global economic expansion remained solid and steady in May.
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Underpinning the latest increase in output were stronger inflows of new orders, faster job creation, rising backlogs of work and improved business sentiment.
The J.P.Morgan Global All-Industry Output Index – which is produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – posted 53.7 in May, up slightly from 53.6 in April.
The rates of growth signalled by the headline index have been broadly stable throughout the past eight months.
Please note that later than usual release dates meant May 2017 Manufacturing PMI data for Indonesia and Services PMI data for Ireland were not available at the time the global numbers were calculated.
The expansion remained broad-based by sector.
Manufacturing production continued to rise at a solid pace, albeit the weakest in six months, with similar rates of expansion signalled across the consumer, intermediate and investment goods categories.
Meanwhile, growth of worldwide service sector activity accelerated to a four-month high.
Rates of expansion improved in the business and financial services categories, but eased at consumer service providers.
By nation, economic activity increased across all of the major regions covered by the survey.
The euro area was a bright spot, with its pace of growth steadying at April’s sixyear record.
Rates of expansion accelerated in the US, China, Japan, India and Russia.
Growth slowed in the UK, while Brazil saw only a marginal increase in output (at a rate of expansion identical to the prior survey month).
May signalled the steepest increase in new orders in four months.
This tested capacity at both manufacturers and service providers, leading to the sharpest accumulation of backlogs of work since November 2013.
The improving performance of the global economy had a positive effect on business sentiment.
Optimism regarding the one-year outlook for output rose to a four-month high and back above the long-run series average.
Job creation was recorded for the eighty-seventh successive month in May.
Moreover, the rate of increase accelerated to a three-month high and was among the best registered during the past two years.
Staffing levels rose in the US, the euro area, Japan, the UK, India and Russia, but fell in China and Brazil.
Input cost inflation eased to a seven-month low in May, while output charges rose at a pace identical to April.
Both price measures tended to signal sharper increases (on average) in developed nations compared to emerging markets. ■