Global economic activity is expanding

Sources: Bloomberg and Wells Fargo Investment Institute. Monthly data from January 1, 2019 to September 30, 2021. PMI = Purchasing Managers’ Index. U.S. Composite Purchasing Managers’ Index level is the Institute for Supply Management Composite Index®, which is a composite index based on the diffusion Indexes of five of the Indexes with equal weights: new orders, production, employment, supplier deliveries, and inventories. Eurozone and China PMI levels use the Markit Manufacturing PMI Index, which is an index developed from monthly business surveys used to monitor the condition of industries and businesses. An index value over 50 indicates expansion; below 50 indicates contraction. The values for the index can be between 0 and 100.

Key Takeaways

  • Europe’s successful effort in containing the pandemic’s latest wave has moved it to a major contributor to the global growth recovery.
  • The sustainability of global manufacturing growth will depend on successful repair of the pandemic-shaken supply chains. The extent to which consumers rotate back to pre-pandemic spending patterns will impact the strength of service sector recovery.