Analysts at Standard Chartered suggest that their global heatmap is showing some signs of growth bottoming out and early ‘green shoots’ of stabilisation appear to be emerging, but it may be too soon to sound the all clear, given significant uncertainties (such as heightened US-China trade tensions and Brexit) remain in the global environment.
Key Quotes
“We see no good reason to expect a sudden improvement, as most risks are to the downside.”
“Global growth remains soft, but appears to be bottoming out. Our GDP trackers (constructed from high-frequency data) indicate that Q1-2019/April growth in 14 of 22 economies are tracking weaker than their four-quarter average, down from 21 of 22 economies previously. Notably, China’s GDP tracker indicates that its growth is tracking faster than the past four-quarter average. However, we remain cautious given weaker activity in April and the decline in manufacturing PMI to 49.4 in May, marking a return to contractionary territory after the March rebound.”
“Export weakness remains. 17 of 22 economies are seeing slower export growth than the past six-month average, with export growth in 11 economies declining.”
“Global manufacturing PMIs seem to be bottoming out. Nine of 21 economies have seen weaker PMIs than the past six-month average, down from 12 of 21 economies previously. The cyclical downturn in the global IT cycle continues to weigh on industrial production.”
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