Markit economic overview

The following is an extract from Markit's monthly economic overview. For the full report please click the link at the bottom of the article.

Global growth hits five-month high

Global economic growth picked up momentum for a second month running in February, reaching the fastest since last September according to PMI survey data. However, the surveys remain consistent with global GDP rising at an annual rate of just 2.5%, which is modest by pre-recession standards. The developed world (particularly the US) continued to outperform the emerging markets, although both saw stronger expansions.

Global PMI and economic growth

Developed v. emerging markets

US rate hike expectations grow as economy booms in February

Markit's US PMI surveys accurately anticipated GDP growth slowing from 5.0% to 2.2% between Q3 and Q4 of last year, but suggest that the US economy has picked up speed again so far this year. With non-farm payroll growth also accelerating in February and the unemployment rate down to 5.5%, its lowest since May 2008, expectations have risen that the Fed will hike interest rates this year, and possibly as soon as June.

US economic growth (GDP v PMI)*

* pre-crisis PMI uses manufacturing data only.

US labour market

UK upturn dogged by waning business investment

The UK all-sector PMI edged marginally higher in February, signalling robust GDP growth of 0.6% in Q1. Weaker service sector expansion was offset by faster growth in manufacturing and construction. But the Bank of England has now held interest rates at their record low of 0.5% for six years and shows no signs of tightening policy amid low inflation, weak business investment and General Election uncertainty.

UK economic growth (GDP v PMI)

Business investment and new orders

Use the download link below to access a full overview of the February PMI surveys, including details of all major economies, policy implications and the market impact.

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