Global economic growth slows as services expansion moderates
The JPMorgan Global All-Industry Output Index at 53.0 in February signalled a further solid expansion in overall output. This was the 17th successive month registering global economic growth.The rate of increase lost some impetus, however, easing to a four-month low. This mainly reflected a growth slowdown in global services output, itself primarily a consequence of weaker expansion at US service providers and a dip into contraction in Japan. The China all-industry output index dipped below 50.0 for the first time since July last year, reflecting the weakening performance of its manufacturing sector.
Services companies in the US and Japan both attributed the trends in output to adverse weather conditions. This suggests that, assuming the impact is only temporary, growth of global services and overall economic output may regain at least some of the momentum lost in the coming months. Growth of global manufacturing production, meanwhile, continued to track at January's robust pace.
The UK remained atop of the global PMI all-industry output growth league table in February, despite seeing its rate of expansion edge down to an eight-month low. Growth in the eurozone hit a 32-month high. Faster growth in Germany and Italy - alongside ongoing expansions in Ireland and Spain - more than offset ongoing contraction in France. India, Brazil and Russia all edged back into expansion territory following declines in output at the start of the year.
February data signalled that the unbroken sequence of increase in all-industry employment has extended to four years. Staffing levels were raised at broadly similar modest clips at both manufacturers and service providers. All-industry job creation was registered in the US, Japan, Germany, the UK, Brazil and Ireland. Cuts were signalled in China, France, Italy and Russia.
Average input costs rose for the fifty-fifth successive month in February. However, the rate of inflation eased to an eight-month low, with slower increases signalled by manufacturers and service providers alike.
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Companies in both sectors, meanwhile, continued to report higher selling prices. Subsequently, all-industry output charges rose for the eighth straight month.
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