Global Barometers increase considerably for the third month in a row

Global Barometers increase considerably for the third month in a row

The Global Economic Barometers increase considerably in May for the third month in a row, signaling an acceleration in the global economic activity since the first quarter of 2021. All investigated regions improve both their assessment of the current situation and expectations for the near future.

The Coincident Global Barometer rises by 17.9 points in May, from 117.2 points to 135.1 points, the highest level of the historical series since 1991. The Leading Global Barometer climbs 14.0 points, to 141.9 points, its highest level since February 2010. All regions developed positively and markedly this month, both regarding the assessment of the present situation and the expectations for the near future. 

The noticeable advance of the leading and coincident barometers in May occurred across all regions and sectors. Despite there being a certain heterogeneity between regions, the combination of economic stimulus programs and immunization of the populations has already made a positive impact, even in the sectors most affected by the pandemic, especially the services sector. The message from the barometers indicates a general recovery of the level of activity during the second quarter of the year”, evaluates Paulo Picchetti, researcher of FGV IBRE.

Coincident Barometer – regions and sectors

All the regions contribute positively to the aggregate result of the Coincident Barometer in May. Europe, with 6.5 points, is the region contributing the strongest to the rise in the Coincident Global Barometer followed by the Western Hemisphere with 6.1 points, and the Asia, Pacific and Africa region with 5.3 points. For the second consecutive month, the assessment of the present situation is noticeably more positive in all the regions, influenced by the acceleration in the level of activity. In most of the countries the situation today has much improved compared to the one observed 12 months ago at the peak of the COVID-crisis. The 2nd graph in the Press Release illustrates the contribution of each region to the deviation of the Coincident Barometer from the historical average of 100 points. 

All five identified sectors contribute positively to the aggregate result of the Coincident Barometer. The increase of 31.1 points in the coincident indicator for the Services sector stands out, as this is the sector that has suffered most due to the measures taken to contain the virus circulation in various countries. All the indicators are above the level of 117 points, with the Services and Industry sectors, and the indicator that measures the aggregated development of economies (Overall Economic Development) reaching the highest level of the series since 1991, the first observation of the Barometers. 

Leading Barometer – regions and sectors

The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average. In May, as the Coincident Barometer, the leading indicators of the three regions each contribute positively to the 14-points rise in the Leading Global Barometer. This month, the Western Hemisphere is the biggest contributor to the rise, adding 7.9 points, followed by the Asia, Pacific and Africa region with 3.8 points and Europe with 2.3 points.

All the Leading Barometer sectors increase in May, influenced by the ongoing vaccination campaigns around the world and the improved prospects for the economy to return to a situation of normality. All sectors record levels above 130 points, reflecting a highly optimistic outlook regarding the near future. With the possibility of a reduction in virus containment measures, the Services sector has become the most optimistic, with an indicator of 150 points, the highest since the start of the series in 1991. 

In May, all sectors contribute positively to the aggregate result of the Leading Barometer. The strongest increase of 16.3 points is that of the leading indicator for Industry, followed by that of Services with a rise of 13.8 points.