February marked a five-month high for global economic activity as rates of new orders and output expansion increased in the manufacturing and service sectors, according to the J.P. Morgan Global All-Industry Output Index, which posted 53.9 in February—up from 52.6 in January. Global input prices, output charges, and backlogs all showed increases in February while the rate of employment remained steady, but unchanged from the previous month.
“The breadth of the expansion is encouraging, with output growth accelerating across both the manufacturing and service sectors,” said David Hensley, director of global economics coordination at J.P. Morgan. “With new order inflows also strengthening, the PMI [Purchasing Managers’ Index] implies that global GDP is on course to post a mild acceleration over the opening quarter as a whole.”
The United States fell in line with the global index by also showing increases in both its manufacturing and service sectors. The Markit U.S. Manufacturing PMI reported an index of 55.1 in February, up from 53.9 in January. Both output and new orders rose sharply, while input costs decreased slightly. Delivery delays contributed to more backlogs of work and a record increase in stocks of finished goods. In the U.S. service sector, February’s rate showed the fastest increase in business activity since October, registering at 57.1 and up from 54.2 in January, reported the Markit U.S. Services Business Activity Index.
“The pace of U.S. economic growth jumped to a four-month high in February … Business picked up especially toward the end of the month, when the impact of bad weather on the East Coast and port delays on the West Coast began to clear, which suggests this may be a temporary upturn,” said Chris Williamson, chief economist at Markit.
- Jennifer Lehman, NACM marketing and communications associate