The global economy expanded at its fastest pace in nearly a year and a half in August, with improvement in both the manufacturing and service sectors and business optimism moving higher. The August J.P. Morgan Global All-Industry Output Index registered 53.9, up from 53.6 in July. This marks the 59th month in a row that the index posted above the 50 neutral mark.
“The August PMI [Purchasing Managers’ Index] signaled a broad and accelerated expansion of global economic output,” said David Hensley, director of global economic coordination at J.P. Morgan. “Overall growth was the quickest since April 2015, underpinned by expansions across the six main categories of manufacturing and services covered by the survey. With new order inflows strengthening, backlogs rising and jobs growth accelerating, the economy looks set to perform well in the coming months.”
Developed nations outperformed emerging markets. The euro area saw a solid gain in economic output, with faster growth in Germany and Ireland. Strong growth in manufacturing was offset by a more tepid increase in the service sector. Output growth in the United States was at its steepest since January. Some acceleration of growth was noted in Japan, while growth slowed to a 10-month low in Australia. Among the emerging nations, economic output accelerated in China and Russia but fell in India and Brazil.
An increase in the backlog of work and further job creation resulted from new business rising at its quickest in nearly three years, while the growth rate of employee numbers reached a 77-month record. Staffing levels rose in the U.S., eurozone, Japan, the U.K., India, Australia and Russia.
– Adam Fusco, associate editor