Global Barometers point to improving conditions

The Coincident Global Economic Barometer increases by 3.4 points in September to 90.3 points, its highest level since July 2022 (91.1 pts.), while the Leading Economic Barometer rises by 3.7 points to 100.2 points, its highest level since October 2021 (101.1 pts.). In both cases, the results were driven by gains in all three regions analysed, with the strongest contribution coming from the Asia, Pacific & Africa region.

“The light at the end of the current stagnation tunnel is beginning to appear. After almost two years of below-average readings, the leading version of the global barometer has returned to its long-term average. However, the assessment of the current situation is still one standard deviation below the average. So global growth remains subdued, but barring new negative shocks to the global economy or major parts of it, the cyclical trough is increasingly likely to be behind us. With inflation falling, the soft-landing scenario in the back of the minds of many central bankers around the world appears to be materialising. Let us hope that this assessment remains valid in the coming months”, evaluates Jan-Egbert Sturm, Director of KOF Swiss Economic Institute.

Coincident Barometer – regions and sectors

After a period of relative stability in the previous months, the Coincident Barometer accelerates in September. The largest contribution to the increase comes from the Asia, Pacific & Africa region with 2.2 points, followed by the Western Hemisphere and Europe, with 0.9 and 0.3 points, respectively. The Coincident indicator for the Asia, Pacific & Africa region remains the highest among the regions, although the Western Hemisphere shows the largest increase for the year with a rise of 13.5 points. The graph below shows the contribution of each region to the deviation of the Coincident Barometer from its historical average of 100 points.

All of the Coincident sector indicators rise this month, the most notable being that for Industry, which approaches the 90-point level. The indicators for the Economy (aggregated business and consumer evaluations), Trade, and Services show similar increases, while the Construction sector records the lowest increase for the month.

Leading Barometer – regions and sectors 

On average, the Leading Global Barometer leads the world economic growth rate cycle by three to six months. In September, the regional contributions follow the pattern of the Coincident indicator, with the Asia, Pacific & Africa region contributing 1.6 points, followed by the Western Hemisphere and Europe, with 1.4 and 0.7 points, respectively. The level of the indicators suggests a more widespread perception of an increased growth rate in the main regions, with the Asia, Pacific & Africa region approaching the neutral level of 100 points.

The Leading sector indicators for Construction, Industry, Trade, and the Economy (aggregated business and consumer assessments) rose in September, while Services fell after strong increases in July and August. Despite the decline, Services remains the sector with the highest level. Only the Industry indicator is still below the neutral level of 100 points.