According to the latest round of global business surveys, the loss of momentum from the second wave of the pandemic was modest and short-lived. The survey continues to highlight stronger gains in the goods-producing sector than in the services sector. However, it is encouraging that the aggregate increase across all industries in February was driven more by a rebound in the services sector PMI.

JP Morgan's global all-industry PMI rebounded by 0.9 points in February, which is consistent with an annualized global GDP growth rate of 3.0%. The highlight of this month’s report comes from the global services sector, with the production index jumping 1.2 points in February, just 0.1 points below its expansionary peak of 52.9.

At the regional level, the strength of the February services PMI was concentrated in developed markets. While each of the major economies posted an increase, the United Kingdom far outpaced the rest of the group with a 10-point jump. In emerging markets, China’s services PMI retreated slightly from its previous peak, falling 0.6 points in February to 51.5. The rest of the emerging markets showed mixed results, with a stable reading in Mexico, an increase in Brazil, and a decline in Russia.

Regarding the forward-looking signal from the February surveys, the all-industry new orders PMI rose to a solid 52.5 from 51.8 in January. In particular, a 0.4-point decline in the manufacturing orders PMI was more than offset by a sharp 1.1-point jump in service orders.  

A message of caution emerges from surveys of the global labor market. While the reading of 50.1 for the global all-industry employment PMI—unchanged from last month—could arguably be consistent with a global economy expanding below its potential, it does not add to the upside risk signal sent by the strong activity readings.

Perhaps the most telling sign from the global PMIs lies in price expectations. After a brief pause in September on their path to recovery, global price PMIs across all industries have surged to levels not seen since before the global financial crisis.

Global Output PMI

PMI vs. Global GDP