Global Economic Growth Improves But Still Hovers Around 3-Year Lows
Global economic growth touched higher for the second straight month in April but remains stuck at around 3-year lows, according to data compiled by Markit. The Purchasing Managers’ Index remains broadly consistent with the global gross domestic product, which is growing at an annual pace of only 1.5 pct, as against its long-run average of 2.3 pct.
Both United States and United Kingdom growth rates remained considerably weaker than seen throughout the previous year, hit in part by political worries, and Japan sliding deeper into potholes. However, subdued Eurozone growth rounded off the gloomy picture, but again masked winners and losers within the region, the report said.
In addition, the US has also seen decline in number of employees hired, with April non-farm payrolls mounting to 160,000 defying expectations of a continuation of the 200,000 gains seen in recent months but exactly in line with the PMI. However, April PMI data signal a slight upturn in the pace of service sector growth.
Japan’s economic woes deepened at the start of Q2. The Nikkei PMI surveys signaled the steepest decline since the sales tax hike of May 2014. For China, employment remained the biggest concern, with factory job losses remaining close to an all-time high after firms scaled back excess capacity. However, it is expected that emerging market economies will grow tentatively in the upcoming quarters, with Nikkei PMI surveys growth in India easing and the Russian economy witnessing the fastest expansion in the past 11 months.