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Source: KOF Economic Institute

Both Global Barometers improve in November. The Leading Global Barometer points to an acceleration in world economic growth in the three to six months ahead. The Coincident Barometer is rising despite the monetary tightening in several countries, but it remains below its historical average.

The Coincident Global Economic Barometer increases by 1.7 points to 90.8 points in November, while the Leading Barometer rises by 0.6 points to 102.7 points, its highest level since September 2021 (108.4 points). All the regions have a positive impact on both indicators, except for Europe in the case of the Leading Barometer. The gap between the two Global Barometers remains more than 10 points for the third month in a row.

“Despite ongoing and recent military conflicts, consumers are gradually becoming less pessimistic about the near future, as evidenced by a further improvement in the outlook for retail and wholesale trade and, in particular, services. While the global industrial sector is facing recessionary tendencies, partly reflecting an inventory cycle – more and more firms have reversed their assessment of their input inventories from too low to too high – the construction sector is being hit by historically high interest rates. However, both are adjusting to the situation, as evidenced by improved expectations in these sectors as well”, evaluates Jan-Egbert Sturm, Director of KOF Swiss Economic Institute.

Coincident Barometer – regions and sectors

The increase in the Coincident indicator was mainly driven by the contribution of the Asia, Pacific & Africa region with 1.2-point, followed by Europe and the Western Hemisphere with 0.4 and 0.2 points, respectively. All three regional indicators are in the 91-92 point range, suggesting a below-normal level of global activity due to the various economic challenges faced by several countries. The graph below illustrates the contribution of each region to the deviation of the Coincident Barometer from its historical average of 100 points.

All Coincident sector indicators developed positively in November, with the exception of the Economy (aggregated business and consumer evaluations) indicator, which declined slightly. The (retail and wholesale) Trade indicator has been developing favourably since July of this year, pulling away from the other sectors.

Leading Barometer – regions and sectors

The Leading Global Barometer leads world economic growth by an average of three to six months. In November, the positive regional contributions are coming from the Western Hemisphere and the Asia, Pacific & Africa region with 0.5 and 0.3 points, respectively, while Europe is contributing negatively with 0.2 points. The level of the indicators suggests that the prospects for an acceleration in economic growth will become more widespread in the coming months, with the indicators for Europe and the Western Hemisphere hovering around the neutral level of 100 points and the indicator for the Asia, Pacific & Africa region taking a more optimistic stance.

In November, the Leading sector indicators for Construction, Services, and Trade are increasing, while those for the Economy and Industry are decreasing. The indicators for Services and Trade reach their highest levels since the end of 2021, reflecting a positive outlook for the coming months.