Global PMI at 5-year high but upturn comes at a cost

LONDON, March 3 (Reuters) – Global businesses grew at their
fastest pace in almost five years last month but also witnessed
increasing price pressures, a purchasing managers’ survey showed
on Thursday.

The JP Morgan Global All-Industry Output Index, which
combines manufacturing and services data, rose to 59.4 from
January’s 58.3, its highest reading since April 2006.

“The global economic recovery strengthened in February, and
remained broad-based across manufacturing and services. Cost
inflation remains a concern, however, especially with oil and
other commodities continuing to rise in price,” said David
Hensley at JP Morgan.

The services PMI, based on surveys of thousands of services
firms in the world’s major economies, rose to 59.3 in February
from 58.2 in January. It stayed above the 50 mark separating
growth from contraction for a 19th month.

But the price of the growth is high as input cost inflation
accelerated to its highest since September 2008 in February, led
by a substantial increase in costs at U.S. non-manufacturing
companies. Rates of inflation were also above the global average
in Britain, Russia and Hong Kong, JP Morgan said.

Employment increased for the eleventh month running in
February, and at the most marked pace since June 2007.

Earlier data showed Europe’s private sector surged ahead at
its fastest pace in almost five years in February but growth
slowed in China and Britain.

The U.S. services sector grew at a slightly faster pace in
February, with its PMI hitting a five-year high.

The global indicator, produced by JP Morgan with research
and supply management organisations, combines survey data from
around 20 countries including the United States, Japan, Germany,
France, Britain, China and Russia.

(Reporting by Jonathan Cable; Editing by Ron Askew)