The global economic recovery downshifted again in September,
as rates of expansion eased in both the manufacturing and service sectors. At
52.6, down further from April's post-recession high, the JPMorgan Global
All-Industry Output Index posted its lowest reading since last November. The
average index reading for Q3 2010 as a whole was the weakest since Q4 2009.
Growth of manufacturing production continued to outpace that
of service sector business activity in September. However, the rate of expansion
in manufacturing output eased to its weakest since June 2009. Growth of service
sector business activity was only modest and the slowest since January.
The recoveries in the US, the Eurozone, China, India and
Brazil all eased in September. There was a slight acceleration in the rate of
increase in the UK. Russia saw its trend in activity move back into expansion
territory, following the heatwave-related contraction in August. Meanwhile, the
downturn in Japan continued, reflecting a further decline in service sector
activity and the slowest growth of manufacturing output since June of last year.
At 52.6 in September, the Global All-Industry New Orders Index
signalled an increase in new business for the fourteenth successive month.
Although the rate of expansion was above August's eleven-month low, it was below
the average for the current sequence of improvement.
The slowdown in new business growth was mainly centred on the
manufacturing sector. Manufacturing new orders rose for the fifteenth month in a
row, but at the weakest pace during that period. In contrast, growth of service
sector new business picked up slightly and outpaced that signalled at
manufacturers. September data pointed to a slight increase in employment for the
seventh month in a row. However, the rate of jobs growth was only slight, as
modest staffing gains in manufacturing were offset by a negligible reduction in
the service sector.
Jobs were added in the US, the Eurozone, China, the UK and
Brazil. Staffing levels were unchanged in India, but fell for the fourth month
running in Japan.
Average input prices rose for the fourteenth successive month
in September. Moreover, the rate of inflation accelerated further from July's
low to a four-month high. Manufacturing input prices rose at a faster rate than
in August, whereas service sector cost inflation eased slightly over the month.
Commenting on the survey, David Hensley, Director of Global Economics
Coordination at US bank JPMorgan, said: "The global recovery lost further traction in
September, with business activity rising at the slowest pace in ten months. The
activity index is pointing to a downshift in global GDP growth to somewhere in
the region of 2.25% q/q saar (seasonally adjusted annual rate). The slowdown
remains broad-based, with both manufacturers and service providers seeing weaker
growth. The signs point to continued soft growth through year's end."