The rebound in economic growth following the slowdown at the turn of the year continued to gain momentum at the start of the current quarter. Immediately following a 1.6-point jump in March, the JP Morgan Global PMI rose another 1.5 points in April and now stands at nearly a 14-year high. The recovery is even more remarkable given that the survey showed only a slight decline during the second wave of the pandemic.

At 56.3, the composite reading for the global all-industry PMI is consistent with growth of nearly 4% year-over-year in global GDP. While this is below estimates for 6% growth in global GDP this quarter, it is typical for PMIs not to capture extremes. Given that global GDP is projected to expand at one of its fastest rates in decades in the coming quarter, it should come as no surprise that the PMIs are underperforming. Rather, the message from the PMIs is twofold: 1) the rapid rise is consistent with a strong acceleration in activity, and 2) the nearly 14-year high is consistent with booming growth.

Similarly, the April report offers encouraging signs that the global services sector is coming back to life. The 2020 global pandemic recession was unique both (if not more so) for its impact on activity in the services sector and for the depth of the recession. As a result, the global services output PMI spent 13 months below the manufacturing output PMIs. This underperformance came to an end in April, with the services PMI rising by nearly 2 points to 56.6—almost one point above the manufacturing output PMI, which also rose by 0.9 points.

Although the April survey shows broad-based strength across all sectors and components, this is partly offset by stronger gains in the U.S. and the U.K. compared with more modest—though still solid—gains elsewhere. Both the U.S. and the U.K. have made considerable progress with vaccinations in recent months. At the same time, increased fiscal stimulus in the United States is adding further fuel to its boom amid the second wave. Elsewhere, the recovery has slowed more sharply. These regional divergences should narrow in the coming months as normalization accelerates in Europe and growth picks up in the rest of the world.

With economic activity accelerating sharply, bottleneck pressures stemming from disruptions in some supply chains are evident in the price PMIs. In recent months, there has been a significant increase in the PMI input price index, and these pressures could eventually spill over into overall consumer price inflation.