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Global economic growth slows in August

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Christian Fernsby |
economic growth
World   Business optimism about the year ahead dropped

Global economic growth remained lacklustre in August, with signs that more weakness may be on the cards.

Topics: Growth economic

Output rose at one of the slowest rates over the past three years as new order intakes expanded at the joint-weakest pace since late-2012.

Business optimism about the year ahead dropped to its lowest since future activity data were first tracked in July 2012.

The J.P.Morgan Global Composite Output Index posted 51.3 in August, down from 51.6 in July.

The only times that the headline index has been lower over the past three years were in May and June of this year (51.2 in both months).

Australia was the only nation for which composite PMI output data are compiled to see contraction.

Growth slowed in the US, the UK, India and Italy.

The slowdown was mainly centred on the global service sector.

Although continuing to outperform the trend in manufacturing production, service sector output growth eased to its second-weakest pace since late-2016.

Activity rose at reduced rates across the business, consumer and financial services categories.

Global manufacturing output stabilised in August, despite further declines in both total order books and new export business.

The consumer goods sector was a relative bright spot, seeing production and new orders rise, contrasting with the ongoing downturns in the intermediate and investment goods industries.

The outlook for the global economy showed signs of further potential weakness to come.

New orders fell at the joint-fastest rate in almost seven years in August, while business optimism sank to a fresh series-record low.

Job creation also slowed, with employment rising to the weakest extent in almost three years.

All-industry staffing levels still increased in most of the nations covered by the survey, the exceptions being a decline in Russia and no change in the UK.


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