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Global PMI at ten-month high while price pressures remain elevated

The global economic expansion unfolded at the fastest pace in ten months at the start of the second quarter of 2024, supported by broad-based growth across both manufacturing and service sectors. Selling price inflation remained elevated, however, even as it eased in April.

The J.P.Morgan Global PMI Composite Output Index - produced by S&P Global - rose to 52.4 in April, up from 52.3 in March. The headline PMI, despite remaining below the survey's long-run average of 53.2, is the highest in ten months and is consistent with annualized quarterly global GDP growth of approximately 2.7%. The latest acceleration in global growth was supported by faster services activity growth, though manufacturing output continued to expand for a fourth successive month, altogether reflective of well-balanced improvements in global economic conditions at the start of the second quarter of 2024.

Underpinning the latest rise in global business activity were looser financial conditions and improvements in consumer confidence. The manufacturing sector also benefitted from the tapering off of destocking efforts, thereby leading to a third monthly rise in manufacturing new orders globally.

That said, price pressures remained elevated even as global selling price inflation eased to a three-month low. The pace at which average selling prices rose in April was close to the rolling 12-month average, to signal that inflationary pressures continue to be stubbornly high heading into midyear. This further highlights the uncertainties for the interest rate outlook, with the inflation fight having made little progress since late 2023. That said, a fall in global employment in April hints at a possible cooling of labour market price pressures in some economies, notably the US. Further insights into how growth, jobs and prices will trend into mid-2024 will be awaited with May flash PMI due May 23.

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Purchasing Managers' Index™ (PMI^®) data are compiled by S&P Global for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.

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