Markit’s Flash PMI for May was such that the research firm expressed alarm about broad economic results for the year’s second quarter. As part of the three large economic regions that contribute to global gross domestic product (GDP), the data are particularly bad news. The U.S. GDP grew at barely 1% in the last reported quarter. China’s GDP expansion has slowed substantially from most previous years.
Chris Williamson the Chief Economist of Markit wrote about eurozone PMI weakness:
A disappointing flash eurozone PMI for May adds further to the suggestion that the robust pace of economic growth seen in the first quarter will prove temporary.
The Markit Flash Eurozone PMI – which is based on approximately 85-90% of normal final monthly replies – slipped to a 16-month low of 52.9 in May, down from 53.0 in April. Economists were expecting an improvement to 53.2, according to a Reuters poll. Expectations were exceeded in both France and Germany, leaving the survey data suggesting that the ‘periphery’ underperformed relative to expectations.
The latest two months’ weak data imply that economic growth has likely slowed in the second quarter, down to a pace of just 0.3% (or 1.2% in annual terms).
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The data will fuel concerns about the global economy already expressed by the International Monetary Fund, the World Bank and some Federal Reserve members.
A global recession, which seemed impossible last year, has become a threat.
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