• For full details of graphics available/in preparation, see Menu -> Planners
 Risk of global recession infographic
Graphic shows PMI data for selected countries.
GN43132EN

ECONOMY

World at rising risk of recession

By Duncan Mil

August 24, 2022 - The global economy is increasingly at risk of falling into recession -- surveys from Asia, Europe and the U.S. show that consumers face generation-high inflation and surging energy costs.

Multiple purchasing managers’ surveys showed business activity contracting and indicated little hope of a turnaround anytime soon.

The Purchasing Managers’ Index (PMI) data are compiled by S&P Global for more than 40 countries worldwide, providing an insight into the global economy’s health. A PMI above 50 per cent indicates economic expansion, while below 50 per cent suggests contraction and a potential recession.

In the U.S., private sector firms signalled a sharper fall in business activity during August. The decrease in output was the fastest seen since May 2020 and solid overall.

“The rate of contraction also outpaced anything recorded outside of the initial pandemic outbreak since the series began nearly 13 years ago,” S&P reported.

The U.S. composite PMI registered 45.0 per cent in August, down from 47.7 per cent in July, and indicated a second successive monthly decrease in total business activity.

In the Eurozone, S&P reported the PMI composite at 49.2 per cent, down from 49.9 per cent in July -- an 18-month low.

The data pinned the euro to a 20-year low against the dollar, with surging gas prices dragging Europe towards recession.

Private sector growth slowed to a crawl in the United Kingdom as factory output fell. The PMI remained above 50 per cent but had dropped by 1.2 per cent since July.

Japan’s factory growth slowed to a 19-month low of 48.8 per cent, while Australia’s composite PMI fell below the 50 mark separating growth from contraction.

Sources
PUBLISHED: 24/08/2022; STORY: Graphic News; PICTURES: Getty Images
Advertisement