The chart below shows the purchasing managers' index (PMI) for the big 8 economies/regions (US, Euro Area, China, Japan, UK, Brazil, Russia, India), which make up just over 50% of the world's GDP. The blue dotted line is for manufacturing, the red dotted line for services, and the green line is the average of the other two.
The service PMI is improving, but the manufacturing PMI is weakening enough that the average is sliding.
The conclusions are pretty much the same as for the other indicators we've looked at recently: a faltering recovery, though not yet recession, but certainly stagnation. The US's index is levelling off, the UK's drifting higher, Russia's and China's also fractionally better, Japan's is flat, India's has slowed a lot since July, Europe's is weakening. So, a mixed result, consistent with stagnation rather than slump. That may change as new data emerge, and I think the risks lie to the downside.
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