Global economy starts 2016 on unsure footing

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.

PMI surveys point to softening of global economic growth at start of 2016

The global economy had a disappointing start to the year, seeing the weakest monthly expansion for 13 months in January according to PMI data compiled by Markit. The PMI data are consistent with global GDP growing at an annualised rate of just under 2%. Services saw one of the weakest expansions recorded over the past three years, while manufacturing growth held at December's lacklustre pace.

Global PMI and economic growth

Manufacturing and services

Emerging market drag shows modest sign of lifting

The PMI surveys for the emerging markets collectively improved slightly on the decline seen in December, but remaining indicative of just 4% annual GDP growth, highlighting how the emerging markets continue to act as a drag on global growth. All of the BRIC nations saw higher PMI readings, but India remained the only shining light. Ongoing downturns were again evident in Brazil and Russia, alongside a stagnant Chinese economy.

Emerging markets

Four largest EM economies

Developed world growth rate dips to one of slowest seen in 2" years

Developed world growth eased to one of the lowest seen over the past 2" years in January, pointing to a further easing of annual GDP growth to just over 1%. Slowdowns were seen in both the US and eurozone, contrasting with faster expansions in the UK and Japan. While some comfort can be gained from the fact that all four-largest developed world economies are still expanding, only the UK showed impressive growth.

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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