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Faster manufacturing expansion edges global growth higher

Staff Writer | August 5, 2016
The start of the third quarter saw the rate of expansion of the global private sector economy accelerate to a three-month peak.
Global economy   J.P.Morgan Global Manufacturing & Services PMI
Growth remained subdued overall, despite a solid pick-up in the manufacturing sector, as the rate of increase in services activity failed to improve from June’s recent low.

The J.P.Morgan Global All-Industry Output Index posted 51.4 in July, up slightly from 51.2 in June.

The index has signalled expansion for 46 months in a row. However, rates of increase so far in 2016 have generally been among the weakest seen during the current sequence of growth.

The manufacturing sector outperformed its service counterpart for the first time since early-2014. Growth of manufacturing production accelerated to an eightmonth high, underpinned by a similar pick-up in new order intakes and a slight increase in new export business.

The pace of expansion in service sector activity was unchanged from June’s four-month low. National PMI data signalled activity growth in the US, the eurozone, China, Japan, India and Russia.

Within the euro area, the expansion was lop-sided by nation. Strong output growth was seen in Germany, but France continued to hover around the stagnation mark.

Although the downturn in Brazil extended into its seventeenth month, the rate of decline was the secondslowest during that sequence.

The UK also saw allindustry output drop, as both the manufacturing and service sectors fell back into contraction following extended periods of growth.