Global economy ends 2015 on soft note amid emerging market gloom

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.

Weaker December Global PMI rounds off worst quarter for a year

The global economy lost some growth momentum in December, according to the JPMorgan Global PMI^TM, compiled by Markit from its national business survey data. Rates of expansion slowed in both manufacturing and services. The weak end to 2015 rounded off the worst quarter, albeit by a narrow margin, seen for a year. The Q4 survey data are broadly consistent with global GDP rising at an annual rate of 2%.

Global PMI and economic growth

Manufacturing and services

Renewed downturn seen in emerging markets

Emerging markets remained a major drag on the global economy, slipping back into decline for the fifth time in the past seven months. At 49.5, the Emerging Market PMI indicated less than 4% annual GDP growth, less than half the average seen in the five years prior to the global financial crisis. Of the BRICs, only India saw faster growth, with renewed downturns evident in Russia and China alongside Brazil's deepening crisis.

Emerging markets

Four largest EM economies

Developed world growth slowest for nearly a year

Growth meanwhile eased to an 11-month low in the developed world, with the PMI dropping from 54.6 to 53.8 in December , pointing to annual GDP growth of around just 1.5%. While the overall rate of expansion signalled is only modest, the surveys at least point to broad-based growth, with all four largest developed economies firmly in expansion territory, led by the UK with Japan once again lagging behind its peers.

Developed markets

Four largest DM economies

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

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