Global manufacturing growth dipped to a 5-month low and global services growth rose slightly to a 2-month high, the net result being a 6-month low in overall global economic growth for May 2012. The USA, comprising 28.1% of the total, continues as the primary driver of world growth. The Eurozone is the primary drag on global growth. ”China, India and Russia all saw all-industry output rise in May, with rates of expansion improving in all three nations. The Japanese economy stagnated, while Brazil slipped back into contraction territory.”
The Global All-Industry Output Index has been greater than 50, indicating the global economy is expanding, since August 2009, for 34 consecutive months.
JPMorgan Global All-Industry Output Index The May 2012 reading of 52.1 (-0.2) indicates expansion at a slower rate and is below February’s 12-month high (55.4). That was the highest since the Index peaked at 59.1 in February 2011, which was a post-recession high. The post-recession low was 51.3 in October 2011. Historical back data has been revised, only the latest 6 months of revisions are reflected on chart. The general trend is not affected by the revisions.
David Hensley, Director of Global Economics Coordination at JPMorgan, said, “May PMI data signal that the global economy is entering a softer growth phase as we head into mid-year. This is most evident in manufacturing, where output rose at the slowest pace in five months. Service sector activity growth is holding up comparatively well. Businesses are responding quickly to slower demand growth, according to the PMI, by tempering the rate of net hiring.”