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Global growth accelerates while price inflation further eases

The global economic expansion accelerated in October amid quicker service sector expansions while manufacturing output stabilised. A further easing of inflationary pressures was also observed, but business confidence about the outlook varied by region.

The J.P.Morgan Global PMI Composite Output Index - produced by S&P Global - registered 52.3 in October, up from 51.9 in September. The latest reading indicated the rate of global growth had picked up from the eight-month low in September but remained below the long-run average. The latest reading is broadly indicative of the global economy growing at an annualized rate of 2.6%, slowing from the 2.9% expansion in the second quarter and was also below an average GDP growth rate of 3.1% in the decade prior to the pandemic.

The latest global economic expansion was driven by a solid rise in services activity. Detailed sector data revealed that financial services and telecommunication services led growth among the main industries tracked, with consumer services activity also further expanding. Manufacturing output meanwhile rose only fractionally after falling for the first time this year in September. Improvements in business optimism across both manufacturing and service sectors hinted at further expansions in output in the coming months, though the improvement was focused on the United States, with sentiment cooling in Europe and across much of Asia amid concerns over geopolitics.

Meanwhile, global employment fell for the second time in three months as job shedding in the manufacturing sector deepened and server sector hiring came close to stalling. With that said, a further easing of selling price inflation, whereby global selling prices rose at the softest pace in four years, signalled that central banks have room to further ease monetary policy settings, which will bode well for the global economy. As such, we will be watching the upcoming flash PMI release for additional insights on economic conditions among major developed economies into the end of 2024 on November 22nd .

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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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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.