Global growth is experiencing an end-of-year cooling despite plummeting global oil prices, a raft of data has shown.
The flash Eurozone services purchasing managers’ index (PMI) – a survey of private sector firms in the service sector – edged upward to 51.9 for December from November’s 51.1, according to figures released by Markit yesterday.
A figure above 50 signifies growth, below 50 signifies contraction. A flash PMI is an estimate of the actual PMI to be released later in the month.
A slight improvement was also seen in the Eurozone manufacturing PMI which rose to 50.8 from 50.1. However, because the Eurozone figures are still close to 50, they are consistent with the Eurozone stagnating.
The US manufacturing PMI dipped to 53.7 in December from November’s 54.8 despite firms reporting falling input prices due to declining commodity prices. Economists hope the US will lead developed economies in growth next year, with expectations that interest rates could be hiked by the Federal Reserve.
The China flash manufacturing PMI registered 49.5, down from 50 in November and signifying a contraction in activity. The figure is also a seven-month low.
Japan manufacturing PMI increased marginally to 52.1 in December from 52.0.
“Today’s flash manufacturing PMIs suggest that the pace of global growth has cooled a little further in recent weeks,” said Michael Pearce, an economist at Capital Economics.
“Nonetheless, the slowdown is certainly not sharp enough to explain the slump in oil prices.”
Capital Economics’ own global manufacturing PMI – which averages the manufacturing PMIs in the US, China, Eurozone and Japan – fell to 51.5 for December from November’s 51.8.