Among the four largest emerging markets, India reported the fastest pace of growth for the fifth month running in December, albeit with growth slowing in both manufacturing and services to the weakest since September, as the Delta wave rebound faded and new virus worries intensified, according to IHS Markit.
COVID-19 factors also inhibited growth in both Russia and Brazil, the former more or less stalled on the back of a third month of falling service sector activity and the latter seeing growth hold at the six-month low seen in November thanks to an ongoing manufacturing downturn, London-based IHS Markit said in a recent note.
In contrast, China saw a marked pick up in the rate of growth, with activity rising at the fastest rate since July as businesses in manufacturing and services continued to recover from the Delta wave disruptions, aided in part also by demand rising thanks to government measures to reduce prices.
Among the four largest emerging markets, India reported the fastest pace of growth for the fifth month running in December, albeit with growth slowing in both manufacturing and services to the weakest since September, as the Delta wave rebound faded and new virus worries intensified, said IHS Markit. COVID-19 factors also slowed growth in Russia and Brazil.
Among the major developed economies, the United States led the expansion in December, with growth showing greater resilience compared to the United Kingdom and Eurozone, where growth rates slowed sharply.
Japan meanwhile continued to lag, reporting slightly weakened output growth in both manufacturing and services, though continued to pull out of the Delta-wave induced downturn recorded between May and September of last year.
The global economy slowed in December as rising COVID-19 case numbers dented the service sector expansion. The key risk to watch going into 2022 will be whether the Omicron variant further subdues growth and disrupts supply chains once again, just as the demand recovery from the pandemic fades away, it said.
The weaker expansion of the manufacturing sector relative to services in recent months has been a function of the service sector benefitting from the opening up of economies after COVID-19 related lockdowns, while manufacturing has struggled amid ongoing supply constraints.
Measured globally, the number of companies reporting that output was constrained by raw material or staff shortages fell for a second month in December, down from an unprecedented peak in October, albeit still running almost three times higher than the long-run average.
The degree to which supplier delivery times lengthened also moderated for a second successive month during December to the lowest since March, hinting that – although supply chains remain under pressure—the worst may be over in terms of average supplier lead-times.
However, it should be noted that the further COVID-19 wave from Omicron poses a risk to future growth via renewed production and supply chain disruptions.
Fibre2Fashion News Desk (DS)