Sharper-than-expected rise in inflation this year could wreak havoc on debt markets
Faster wage growth brought on by a continued global economic upturn could upset the apple cart despite bullish prospects for year
The global economy has begun the year with a bang. A series of closely watched surveys published this week shows output in the manufacturing sector is struggling to keep pace with demand.
In the United States, manufacturing activity in December expanded at its fastest clip in 13 years, while in the euro zone output grew at its briskest pace since 1997. European countries “dominated the [manufacturing] growth rankings for much of 2017”, according to IHS Markit, a data provider that produced one of the surveys.
In China, manufacturing output, although weaker, grew at its fastest pace since August, with stronger increases in output and new orders, and capacity pressures continuing to build.
Even in Britain, whose economy has slowed markedly because of uncertainty associated with its departure from the European Union, factory output in the final quarter of last year was the strongest in three-and-a-half years.
The buoyant growth rates mean that at a global level manufacturing output is now running at a seven-year high, “with the robust upswing being carried over into 2018”, the JPMorgan Global Manufacturing PMI notes.
