Stronger services growth takes Global PMI to four-month high
Staff Writer |
The end of the second quarter saw a mild improvement in the rate of global economic expansion.
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Output growth accelerated to a four-month high and was among the best over the past three-and-a-half years.
The solid trend in job creation was also sustained, with the rates of increase achieved since August 2017 better than those registered throughout much of the prior decade.
The J.P.Morgan Global All-Industry Output Index1,2 – which is produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – rose to 54.2 in June, up from 54.0 in May.
The headline index has signalled expansion for 69 consecutive months.
Please note that, due to later-than-usual release dates, manufacturing PMI data for Canada and Colombia were not available for inclusion in the June 2018 global PMI numbers.
The latest survey further highlighted a divergence in the performances of the manufacturing and service sectors.
Manufacturing output growth slowed for the second successive month to its lowest since last July, partly due to the pace of increase in new export business easing to near-stagnation.
In contrast, the rate of expansion in service sector activity accelerated to one of the best seen in over three years.
Developed nations (on average) outperformed their emerging market counterparts in terms of all-industry output growth in June.
Rates of expansion were solid in both the US and the euro area, remaining close to May’s high in the former and accelerating in the latter.
The upturns in the UK and Japan also strengthened.
Among the largest emerging nations, the performances of China and India were the most positive.
In both cases growth recovered, reaching a four-month high in the former and the fastest in 20 months in the latter.
The rate of output expansion was the weakest in over two years in Russia, whereas the downturn in Brazil accelerated.
June saw the rate of increase in new business improve slightly, and remain sufficiently strong to test capacity.
Backlogs of work expanded in both the manufacturing and service sectors.
Companies responded by raising employment, with job creation registered in the US, the euro area, Japan, the UK, India and Australia.
Losses were seen in China, Brazil and Russia.
Business optimism fell to a six-month low in June.
Confidence remained positive in developed and emerging nations, but eased (on average) in both.
Germany, the UK, Brazil, Russia and Australia were the only nations to report improved sentiment.
Price pressures gathered pace in June, with rates of inflation in output charges and input costs both accelerating.
Increases in both measures were steeper in developed nations compared to emerging markets. ■