Thought for the day

The World's Economic Growth Engines Slide Into Recession

26 September 2022
Global recession looms as the continuing war in Europe, rampant price inflation, and geopolitical uncertainty impact on the three biggest growth drivers of economic activity.

Monthly research for the Global Sales Managers Index covers China, the USA and India. Together over the past decade, these three countries accounted for almost 60% of global economic growth. None are proving immune to the serious problems now weighing heavily on global economic activity.

The latest growth related elements of the Global Sales Managers Index show that the world economy is heading back into recession, as war in Europe drags on, damaging global energy and food supplies; price inflation continues to spiral, in some cases now exceeding 10%, fuelled both by shortages of goods and services and the lax monetary policies followed by many countries in reaction to Covid.

As a consequence, three out of four of the growth related Sales Managers Indexes are at near two year lows. The overall Sales Managers Index has tipped into recession, in July registering well below the crucial 50 "no change" level. Staffing levels remain a long way below those seen a year ago. Only Business confidence (that business activity will improve over the next few months) remains fractionally over the 50 level, but also at a 24 month low, and still falling month on month.

The (only) good news is that the Price Index fell significantly in July, suggesting strongly that supply problems may be slowly resolving as business adjusts to the severe problems faced over the Covid years..  See more data...

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