The big 5 PMI index is a GDP-weighted average of the US, UK, Japan, India and Euro-zone PMIs. The big 5 make up just over 50% of the world economy using purchasing-power parity for the currency conversion.
The whole-economy PMI is an unweighted average of the manufacturing and the services PMIs. It should roughly parallel GDP growth. The match isn't perfect, but it's usable. The PMI tends to lead GDP, partly because it's a diffusion (momentum) index.
The index has levelled off, with most of this decline due to weakness in the big-5 manufacturing index, except for the UK. Even the Euro zone, which had had a strong recovery in manufacturing, is now sagging, presumably a consequence of Trump's trade war.
Services are holding up better, with the result that over the last couple of months, the average of the two has been flat.
The whole-economy PMI is above the 50% recession line, which suggests the economy is still expanding, though not rapidly. However, the expansion will prolly be enough to slow interest rate cuts.
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| Click on chart to see it more clearly "Weighted average" means weighted by PPP GDP. |
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