Business surveys released today suggest that the world’s four largest economies slowed in April. But global growth has not collapsed. The US Markit manufacturing PMI fell in April, possibly reflecting the headwind from the stronger dollar. Meanwhile, the euro-zone manufacturing and composite PMIs fell in April but remain well above their level in the second half of last year. The further fall in China’s manufacturing PMI for April suggests that the recent weakness of its economy goes beyond temporary distortions due to the late timing of Chinese New Year. In Japan, things have gone from bad to worse. The headline manufacturing PMI fell for a third consecutive month in April, to its lowest level since the immediate aftermath of last year’s sales tax hike. This suggests that the weakness in Japan in the first quarter has persisted into Q2. “The global economy has made a disappointing start to 2015. But looser monetary policy combined with the boost from lower oil prices (and improved weather in the US) should mean that the world as a whole grows by around 3½% this year, a similar pace to that in 2014.” says Capital Economics in a report
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