Global economy still firming
Simon Ward
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The view here that an upswing in global economic growth is under way and will not be derailed by “Brexit” received support from last week’s “flash” purchasing managers’ surveys for July, showing stronger results in the US and Japan and little change in the Eurozone, despite the expected UK slump.
There were no flash results for China but the Market News International business sentiment indicator rose further last month to its highest level since October – see here.
The American Chemical Council today released a July reading of its chemical activity barometer – a leading indicator of the general economy that exploits the chemical industry’s sensitivity to cyclical changes. Six-month growth in the barometer rose further to its fastest since 2011 – see first chart.
US second-quarter GDP numbers later this week are expected to show a recovery in growth despite a decline in stockbuilding last quarter. A rebound in real narrow money expansion in late 2015 had suggested that economic momentum would revive around mid-2016 and money numbers through early July continue to give a positive signal – second chart.
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