Global Barometers remain at a high level but move in opposite directions

Global Barometers remain at a high level but move in opposite directions

The Coincident Global Barometer keeps the upward tendency and reaches its highest historical level in June. Moving in the opposite direction the Leading Barometer decreases, but after having risen markedly in the three previous months. 

The Coincident Global Barometer rises by 1.6 points in June, to 137.0 points, the highest level since the series started in 1991. The Leading Global Barometer decreases by 7.7 points, to 132.4 points. All the analysed regions develop positively in the Coincident Barometer, while all regions decline in the Leading Barometer. 

In June, the Coincident Barometer shows that the level of economic activity has been rising above the expected at the beginning of the year, a movement that spreads throughout different sectors and regions. Despite the decrease, the Leading Barometer remains at a high level, indicating continued recovery during the second quarter”, evaluates Paulo Picchetti, researcher of FGV IBRE.

Coincident Barometer – regions and sectors

The Asia, Pacific and Africa region make the strongest contribution to the rise in the Coincident Global Barometer, with 1.0 points, followed by Europe and the Western Hemisphere, with 0.4 and 0.2 points, respectively. Assessments of the current situation continue to improve in all the regions, presumably influenced by the acceleration in the level of activity as populations are being vaccinated. Regional indicators in the Western Hemisphere and Europe have reached an all-time high and the one for the Asia, Pacific and Africa region have hit a new peak since 2010. 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. 

Of the five sectors, three contribute positively to the aggregate result of the Coincident Barometer. After the markedly increase of the previous months, the indicators that measures the Services and Construction sectors and the aggregated development of economies (Overall Economic Development) climb moderately, while Industry and Trade sectors register a slight decrease for the month. All the indicators are above a level of 125 points, with the Services sector and the indicator that measures the aggregated development of economies Overall Economic Development) reaching their highest levels of the series with 152.9 and 140.6 points, respectively. 

Leading Barometer – regions and sectors

The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average. The leading indicators of all the three regions contribute negatively to the result of the Leading Global Barometer in June. The Western Hemisphere makes the strongest contribution to the fall, decreasing 3.3 points, followed by the Asia, Pacific and Africa region, with -3.0 points, and Europe with, -1.4 points.

All leading sectorial indicator bundles decrease in June, after strong increases in the previous months. Even with the fall this month, almost all the sectors record levels above 130 points. With 124.1 points, the only exception is the indicator that measures the aggregated development of economies (Overall Economic Development). The level of the indicators continues to reflect a highly optimistic outlook in relation to the near future. The strongest contribution to this month’s fall came from Industry, followed by Services and Trade. The remaining sectors contribute with less than 1.0 point to the aggregate result.