Welcome to the quarterly update of the global consumer index. The GCI is a forward-looking barometer that provides an early steer on consumer spending and growth prospects in the world’s 20 largest economies.
It combines key leading indicators of consumer spending into a single global index, including equity market indices, commodity prices, business and consumer confidence, industrial production and others.
In this video, we analyse recent trends in the GCI, and the factors driving its performance.
Growth has held steady from April to May, but momentum has eased back. This suggests that the acceleration that was signalled in February did not in fact result in a more prolonged upturn. Looking at the bigger picture, the GCI has circled within the lower left quadrant over the last 6 months – remaining below the long-term trend with the exception of February.
The overall picture is mixed, with trends in underlying indicators moving in opposite directions.
Consumer confidence has experienced a small weakening overall, particularly in crisis-hit Eurozone economies and global commodity prices have declined.
On the other hand, global money supply has increased, fuelled by monetary easing in key economies such as the Eurozone, Japan, South Korea and Australia.
Equity markets continue to rally on the back of this easing. Other strong performers include global industrial production, pointing to a more positive outlook ahead for global manufacturing.
The net impact of these trends combined remains positive. The GCI indicates that consumer spending growth will hold steady over the coming months – even if below long-term growth. This is in keeping with the post-crisis ‘New Normal’ environment of weaker global economic performance.
The overall message is that the global recovery will be slow and bumpy, but we are cautiously optimistic that the global economy and consumer spending will strengthen later this year as fears over a continued slowdown abate. Business can keep abreast of key developments in the global economy from the Global Economy Watch, which provides our latest view on the GCI and the global economic outlook.