The Global Barometers fall once again in November after a slight improvement in the previous month. With the results, the Coincident Barometer reaches its lowest level since August 2020 and the Leading Barometer is the second lowest since June 2020, beating only the level of last August.
The Coincident Global Economic Barometer falls 6.5 points and the Leading Global Economic Barometer 3.4 points in November. With this result, the two indicators are getting closer to each other, recording 84.1 points and 84.2 points, respectively. The drop in the indicators is fuelled mainly by the Asia, Pacific & Africa region. Only the Leading indicator for Europe records a slight improvement this month.
“The fall of the Global Barometers in November reinforces the concern over the main challenges to the level of activities in the coming months throughout the regions and in most sectors. Among these challenges, the highlights are global inflation, the war in Ukraine, and the effects of zero tolerance with Covid in China. As none of these issues are likely to be resolved in the short term, the expectations depicted by the Global Barometers consistently point in the direction of a slowdown in economic activity in the coming months”, evaluates Paulo Picchetti, researcher of FGV IBRE.
Coincident Barometer – regions and sectors
In November, the Asia, Pacific & Africa region contributes 5.2 points to the decrease in the Coincident indicator, while the Western Hemisphere and Europe regions contribute -0.9 points and -0.4 points, respectively. The regional indicator for Europe has now recorded a sequence of eleven consecutive decreases and is at the lowest level among the regions. The macroeconomic situation for 2022, with the war in Ukraine and its consequences, such as the energy supply crisis in European countries, continue to define the adverse framework of the region. The graph below illustrates the contribution of each region to the deviation of the Coincident Barometer from the historical mean of 100 points.
Among the coincident sector indicators, only Trade increases this month. The Services indicator drops almost 15 points and Industry almost 8.0 points. With this result, the indicator for the general state of the Economy (aggregated business and consumer evaluations), Industry, Services, and Trade are in the 80-90-point band, while Construction drops further away from the historic mean of 100 points.
Leading Barometer – regions and sectors
The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average. In November, the Asia, Pacific & Africa region and the Western Hemisphere contribute negatively to the fall in the indicator, with -3.1 points and -0.8 points, respectively, while Europe contributes to the opposite direction with 0.5 points. The indicators portray a scenario that remains pessimistic for these economies for the coming months, fluctuating in the 80-90-point band since April of this year.
Among the Leading indicator sectors, only the general state of the Economy (aggregated business and consumer evaluations) does not fall in November. The Trade indicator remains at the lowest level among the sectors and Construction at the highest.