Global manufacturing growth plunged to a 3-year low and global services growth plunged to a 29-month low, the net result being a 35-month low in overall global economic growth for June 2012. This is a Post-Great Recession Low and “signalled the weakest expansion of output during the current near three-year period of growth”. The Global All-Industry Output Index has been greater than 50, indicating the global economy is expanding, since August 2009, for 35 consecutive months.
The USA, comprising 28.1% of the total global output, had been the primary driver of world growth until June when manufacturing contracted and services slowed significantly. The Eurozone continues as the primary drag on global growth. China, UK, Russia also slowed and Japan is in contraction. The economies of India and Brazil expanded.
JPMorgan Global All-Industry Output Index The June 2012 reading of 50.3 (-1.8) indicates marginal expansion 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 had been 51.3 in October 2011, but is now the current reading of 50.3 in June 2012. Historical back data has been revised, only the latest 7 months of revisions are reflected on chart. The general trend is not affected by the revisions and monthly data is materially correct.
David Hensley, Director of Global Economics Coordination at JPMorgan, said, “The PMIs suggest that the global economy downshifted into neutral gear in June. Output and new order inflows were only marginally above stagnation levels, signalling that global GDP growth over Q2 2012 as a whole will be the most sluggish for around three years.”