The pace of global economic growth continued to be strong and stable in May. Supporting the latest rise in output were stronger inflows of new orders, more rapid job creation, rising backlogs of work and improved business sentiment. The J.P.Morgan Global All-Industry Output Index rose slightly to 53.7 in May from April’s 53.6. The paces of growth hinted by the headline index have been widely stable throughout the last eight months.
The growth stayed widespread by sector. Manufacturing production continued to expand at a strong rate, albeit the weakest in six months, with similar rates of growth hinted throughout the consumer, intermediate and investment good categories. In the meantime, growth of worldwide service sector activity rose to a four-month high. Growth rates improved in the business and financial services categories; however, it alleviated at consumer service providers.
Country wise, economic activity was up throughout major regions covered by the survey. The euro area was a bright spot, with its rate of growth stabilizing at April’s six-year record. Paces of growth accelerated in the U.S., China, Japan, Russia and India. Growth decelerated in the U.K, while Brazil witnessed just a marginal rise in output.
May hinted at the steepest rise in new orders in four months. This tested capacity at both manufacturers and service providers, resulting in the sharpest accumulation of backlogs of work since November 2013.
The rebounding performance of the global economy had an upbeat impact on business sentiment. Optimism about the one-year outlook for output was up to a four-month high and back above the long-run series average.
