Filtered by Subscriptions: Global Economics Use setting Global Economics
The slump in auto production related to supply chain disruptions has dragged down the pace of the global recovery this year. And while there have been some indications that supply of auto parts is starting to pick up again, meaning there is scope for an …
19th November 2021
Rising virus numbers have caused containment measures to be reimposed in Emerging Europe and now seem to be harming consumer activity in the euro-zone. There is a strong risk of further restrictions over the winter in several economies, but in most cases …
17th November 2021
While inflation will stay well above target in both the US and Germany in the months ahead, the detail of the latest inflation prints seems to confirm that price pressures are likely to be much more persistent in the US. Crucially, rents are becoming a …
11th November 2021
With household saving rates still elevated in most developed economies, “excess savings” have continued to rise. If people were to run down these savings, this would breathe new life into consumer recoveries. Households’ saving rates (showing the …
9th November 2021
The raft of Q3 data that have been released so far have been the proverbial mixed bag with some countries (e.g. France) reporting surprisingly strong growth and others (e.g. the US) surprising on the downside. However, the big picture that emerges is that …
3rd November 2021
The October manufacturing PMIs gave us more of the same – evidence that supply disruptions are getting worse, industrial output growth is weakening, and price pressures are intensifying. This fits with our view that the world economy is in for a period of …
2nd November 2021
The flash PMIs for October brought news of an encouraging start to Q4 for services sector activity, alongside yet more evidence that shortages are holding back growth in industry and stoking even stronger price pressures. If it wasn’t clear already, …
22nd October 2021
The recent upward revision to our oil price forecast does little to alter our view that inflation will fall in 2022. Even if oil prices don’t fall as we expect them to and they stay at their current level, energy inflation would drop back next year, …
21st October 2021
The pandemic is still depressing the size of the labour force in many developed countries. This probably reflects a mixture of temporary and permanent factors, so some of it may yet be reversed. But even if the bulk of the reduction in the labour force …
19th October 2021
We think that Indeed job data are useful and timely indicators of labour demand, and we will continue to monitor them in the months ahead. The latest data support the view that labour shortages are rising, and are most acute in the US, Australia, and …
18th October 2021
It is a year since we published our “ Economies after COVID ” series, so now seems like a good time to pause and take stock of how our predictions about the legacy of the pandemic are shaping up. There is a still a long way to go until the pandemic’s full …
8th October 2021
The key message from today’s batch of PMIs for September is that supply constraints are still limiting growth in industry, and there is little to suggest they will ease materially any time soon. So, manufacturers and wholesalers will continue to face …
1st October 2021
It is an under-statement to say that house prices have weathered the pandemic well; housing markets are positively booming. Yet the drivers of this rise in prices are rather different to those of the pre-2007 housing boom, meaning that we do not seem to …
28th September 2021
The flash PMIs for September show that the pace of growth slowed across developed economies towards the end of Q3, suggesting that the boost to activity from reopening is fading. But inflationary pressures show no signs of abating, with indicators of …
23rd September 2021
If, contrary to our opinion and the consensus, a collapse of Evergrande ends up having a significant impact on the rest of the world, it will be because it first causes either major financial dislocation within China or a property-led slump in China’s …
22nd September 2021
In this Update , we answer six key questions about the surge in natural gas prices. The key point is that it will keep inflation in DMs and many EMs above central bank targets for a few months longer than we had previously assumed. Governments are already …
21st September 2021
We think that the ‘China’s Lehman moment’ narrative is wide of the mark. On its own, a managed default or even messy collapse of Evergrande would have little global impact beyond some market turbulence. Even if it were the first of many property …
16th September 2021
Our inflation forecasts already incorporate some passthrough of pipeline pressures including higher shipping costs to consumer prices. But given that maritime shipping costs have never surged anywhere near as much as they have done during the past year, …
14th September 2021
Supply shortages may continue to limit growth and put upward pressure on prices for several months to come before a new wave of COVID infections is brought under control, economies reopen, and spending patterns normalise. Shortages have related to both …
9th September 2021
The data released over the northern hemisphere summer break have suggested that economic recoveries in most countries have started to lose some steam. At the same time, while inflation is generally higher now that at the start of the summer, there are …
2nd September 2021
August’s global manufacturing PMIs brought more evidence of a slowdown in the sector. Growth was always going to fall back as activity approached more normal levels, but supply shortages are also playing a role. There is early evidence that the adverse …
1st September 2021
The flash PMIs for August confirm that growth in developed economies is slowing from a strong pace. This normalisation was always to be expected after the rapid post-pandemic revival, but the renewed rise in virus numbers and staff and materials shortages …
23rd August 2021
Most attention has been concentrated on the transient drivers of higher inflation, but a more sustainable pick-up in rent inflation is also underway in the US. This Update recaps how rents are treated in the CPI data in major advanced economies and …
17th August 2021
Our Mobility Trackers suggest that the Delta variant has had limited impact on economic activity outside parts of Asia. The risk of stricter containment measures will continue to be greater in much of the emerging world than it will be in developed …
13th August 2021
If labour earnings growth took a decisive leg up, this would force central banks to rethink how long this year’s bout of higher inflation in advanced economies will last. The challenge is that the headline earnings data are affected by distortions that …
4th August 2021
The main takeaway from today’s batch of manufacturing PMIs is that industrial output growth looks to have peaked. Output indices have generally stopped rising, and new orders indices have come off the boil. Even so, with supply unable to keep up with …
2nd August 2021
The slowdown that we anticipate in China over the next 6-12 months is best viewed as a return to normality following a period of above-trend output. While it will be a headwind to growth in some industrial commodity producers, we do not think it will …
23rd July 2021
The overarching message from today’s batch of flash PMIs was that higher inflation isn’t going away anytime soon in major advanced economies. Some of the inflation indicators edged away from their recent record highs, but that leaves them at historically …
In this Update we identify five things that we have learned from reopening so far. Some we anticipated, including the rapid rebound in activity once restrictions were removed and an easing of trade growth as output in advanced economies resumed. But …
20th July 2021
The apparent success of vaccines at preventing severe illness and death from the Delta coronavirus variant should mean that it does not pose a major threat to recoveries in most advanced economies. However, the rapid spread of the Delta variant poses a …
14th July 2021
The dip in the global manufacturing PMI in June left it at a very high level, with the advanced economies leading a continued strong recovery in output. But industrial recoveries seem to have lost pace in Asia, reflecting a slowdown in demand for imports …
1st July 2021
Inflation indicators in the flash PMIs for June reached new record highs and supplier delivery times lengthened still further. However, outside the US at least, there are few signs that goods shortages and higher costs have held back the recovery in …
23rd June 2021
Much of the rise in inflation in major advanced economies from February to May has reflected the fact that prices fell in the same period a year ago. That said, depending on how you measure it, around half of the jump in inflation in the US and UK over …
18th June 2021
Our Mobility Trackers show that global economic activity is benefitting from the removal of restrictions in advanced economies. Good progress with vaccinations suggests that this trend should continue, albeit with risks around new variants. The story is …
17th June 2021
A rise in inflation was always likely to happen this year as economies re-opened and energy prices recovered from last year’s sharp falls. But in the US in particular, the increase since the start of the year has exceeded even our relatively strong …
10th June 2021
The direct implications of this weekend’s deal on global corporate taxation struck by G7 finance ministers will be limited. But the deal suggests that wealthy nations have found renewed determination under a Biden presidency to cooperate on global issues, …
7th June 2021
The global manufacturing PMI held broadly steady in May as a sharp drop in India’s survey was offset by rises in other major economies whose recoveries appear to be continuing unabated. Meanwhile, goods shortages are exerting upward pressure on prices, …
1st June 2021
There are signs that countries whose rollouts are advanced have hit something of a limit, with the remaining population now reluctant to be vaccinated. But this will not necessarily prevent economies reopening once the vulnerable are vaccinated. Potential …
28th May 2021
The flash PMIs for May suggest that the recovery is well underway in those economies that are now on top of the virus. However, supply is still struggling to keep up with surging demand. And as well as exerting upward pressure on prices, there are some …
21st May 2021
While pay growth has risen across the developed economies, in several cases this reflects reduced hours or the fact that a disproportionate number of low paid workers have lost their jobs. There are clear signs of labour shortages in the US, but for now …
20th May 2021
We think that the broad-based rally in commodity prices will go into reverse later this year, so the upward pressure on inflation in advanced economies should be temporary. But there is a clear risk of a more sustained pick-up in inflation, especially if …
12th May 2021
Our Mobility Trackers suggest that global economic activity has continued to pick up and this positive trend should continue as vaccination programmes gather pace and there is a more widespread lifting of restrictions. That said, the surge in new cases in …
10th May 2021
In this Update , we outline the key data that will help us gauge the evolution of inflationary pressure in advanced economies as they open up. Pandemic-related distortions mean that it is particularly important to understand the detail to distinguish …
5th May 2021
The rise in the global manufacturing PMI suggests that the strong recovery in industrial production continued in April, but supply constraints are continuing to push up prices around the world. While the IHS Markit surveys are yet to provide evidence that …
4th May 2021
Income support and limits on spending had already led households in advanced economies to build up almost $3.5tn in extra cash by the end of 2020, equating to 7.6% of GDP. And the stockpile of these supranormal savings will continue to grow in 2021. We …
26th April 2021
The advanced economy flash PMIs for April painted a positive picture, albeit with recoveries in the US and UK seemingly far outpacing those in the euro-zone and Japan as restrictions were relaxed in the former two economies. Input prices are still rising …
23rd April 2021
A divergence between strong surveys and weak industrial ‘hard’ data, mainly in the euro-zone, has again raised questions about how to interpret the business surveys. There are several reasons why survey indices of output have overstated the actual …
13th April 2021
Mobility data have weakened in many parts of the world in recent weeks as virus numbers either remain high or continue to climb, risking restrictions staying in place for even longer. The latest data out of Israel suggest that its speedy vaccine rollout …
9th April 2021
While Asian goods exports have fared better than those from the rest of the world and especially those from advanced economies over the past year, this performance gap should narrow as economies reopen. Global goods trade continued its strong recovery at …
8th April 2021
The rise in March’s global manufacturing PMI suggested that world industrial production continued to recover. But the headline index masked a divergence at the country level, with sizeable gains in advanced economies offsetting small falls in major EMs. …
1st April 2021