Malaysian factories suffered shutdowns in June due to the rise in Delta variant cases and, as of now, are still not operating at full capacity. Our PMI survey results showed a close-to-record decline in output and new orders. This does not bode well for Malaysian manufacturing, employment, and much needed relief in supply chain delays. But is it all dismal? Perhaps new fiscal policies in Hong Kong SAR offer some hope for recovery? Join our PMI economists as they discuss these issues and more. Paul Smith, Economics Director, IHS Markit https://ihsmarkit.com/experts/smith-paul.html Andrew Harker, Economics Director, IHS Markit https://ihsmarkit.com/experts/harker-andrew.html Usamah Bhatti, Economist, IHS Markit https://ihsmarkit.com/experts/bhatti-usamah.html

Flash PMI surveys showed the eurozone enjoying the strongest expansion of the major developed economies in August. The eurozone has also avoided the lockdown measures associated with rising COVID-19 cases which dampened growth in the US and led to deepening downturns in Japan and Australia. The eurozone is also benefitting from fewer supply and labour market constraints than the UK and US, where growth slowed sharply due to these shortages, with prices rising commensurately higher as a result.

The eurozone enjoyed the fastest growth of the world's major economies for a second month running in August, according to the flash PMIs, with growth slowing sharply in both the US and UK while Australia and Japan slipped into deeper downturns.

The eurozone is showing particular resilience to the Delta wave of COVID-19 so far, with growth slowing only slightly in August compared to July's 15-year high. In fact, the average readings for the third quarter so far puts the bloc...

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The backlogs of work index from IHS Markit's PMI business surveys captures the volume of orders that a company has received but has yet to either start work on or complete.

As such, the index is a useful barometer of the extent to which companies are struggling to cope with demand and can hence act as a leading indicator of the expansion of capacity through either investment or hiring. The index can also provide useful information about pricing power and developing inflation trends, as well as corporate earnings.

As such, the backlogs of work index also generates powerful signals for investment strategy.

How is the PMI backlogs of work index calculated?

Purchasing managers participating in IHS Markit's PMI business surveys, conducted in 44 countries, are asked how the volume of uncompleted work has changed compared to the prior month on average. The precise question wording is:

"Are your backlogs of work higher, lower...

The latest IHS Markit Global Electronics Purchasing Managers' Index (PMI) for June was strongly expansionary, boosted by buoyant demand in key markets. Rebounding consumer spending and industrial production in key economies, notably the US, China, EU and UK, is helping to drive demand for a wide range of electronics products.

However, the strength of global electronics demand is continuing to exacerbate semiconductors shortages for some manufacturing industries, notably the global automotive sector. Supply chain disruptions to semiconductors production have also impacted on the situation. The new COVID-19 waves in East Asian electronics manufacturing hubs such as South Korea, Taiwan, Malaysia and Vietnam have further increased risks of potential supply chain disruptions at electronics plants due to escalating domestic pandemics. Meanwhile the latest IHS Markit Global Electronics PMI survey shows evidence of sharp increases in electronics industry input prices as well as...

IHS Markit's PMI business surveys showed the global economic recovery continuing into July, but the rate of expansion lost momentum for a second month running.

Slower growth could be in part linked to supply constraints and further COVID waves from the Delta variant. Firms' backlogs of work consequently rose globally at the fastest rate since 2004 in a sign of supply running behind demand to a worrying extent. Prices consequently rose sharply again, hinting the recent spike in inflationary pressures has yet to peak.

Global growth cools further from May's 15-year high

The global economy continued to expand at a solid rate in July, according to the JPMorgan Global PMI™ (compiled by IHS Markit), albeit with the rate of growth cooling further from May's 15-year high to the slowest since March. The expansion took the recent run of growth into its thirteenth consecutive month.

Services again lead upturn as COVID restrictions are further eased

The...

The IHS Markit Global Sector PMI™ signalled sustained strong recovery for the global economy, led by the consumer services sector. Less congruent with financial markets had been the weakness of basic materials output in July, with the wedge underpinned by supply constraints.

Global Sector PMI™ indicates consumer services lead sector growth again in July

Global Sector PMI™, compiled by IHS Markit, revealed that all 21 sectors and eight sector groups sustained in growth in the latest July update. Tourism & Recreation was the fastest growing sector, with Consumer Services the fastest growing among the broader sector groups. This indicates a continuation of the global economic recovery, led by strong services output, particularly across the US and Europe.

That said, Tourism & Recreation, as with all bar the Consumer Goods sector, experienced an easing of growth momentum according to the July survey. While the spread of the Delta variant across the Asia...