In the second quarter of 2016, global economic growth failed to improve its sluggish pace, a sign that the world “remains mired in the worst growth phase for three-and-a-half years,” according to Chris Williamson, chief economist at Markit, a financial data service.
“Once again, the lack of any growth driver was evident: weak rates of expansion in the U.S. and U.K., linked in part to rising political uncertainty, a struggling recovery in the eurozone and renewed downturn in Japan coincided with an ongoing near-stagnation of the emerging markets,” Williamson explained in a report early Tuesday.
But the news is even worse for the U.S.
In the U.S., growth remains “disappointingly weak” compared to what was seen in early 2016. Plus, Markit’s flash PMIs suggest the U.S. economy is growing at an annualized pace of just less than 1%, as measured in the second quarter.
“This represents the weakest extended period of growth seen in the U.S. since the 2009 financial crisis, with businesses struggling amid weak global demand, the energy sector downturn, the strong dollar and uncertainty caused by the upcoming presidential elections,” Williamson said.
The JPMorgan Global PMI, the Purchasing Managers’ Index compiled by Markit from its worldwide business surveys, held steady at 51.1 in June, but that marks its weakest quarter since the fourth quarter of 2012.
“The data point to global GDP (at market prices) rising at an annual rate of just 1.5%, below the long run average of 2.3% and signaling the weakest growth spell since the first half of 2013,” Williamson stated.
In the developed economies, growth as measured by the PMI fell to 51.5 in June from 51.6 in May, hitting its second-lowest level over the three years, “maintaining sluggish growth that has been evident since the down-shifting of gear back in February,” he says.
“The malaise was broad-based, with both manufacturing and services recording only modest growth rates in June. Services remained the stronger-growing sector, albeit by only a small margin, with the pace of expansion much reduced compared to that seen at the start of the year,” according to the economist.
Emerging markets’ PMI improved slightly, rising to 50.1 in June from 49.8 in May. But they remained in an overall state of stagnation, Williamson says, “continuing the trend seen over much of the past year.”