Global Growth Drivers Suggest a Dreary Outlook for the Rest of 2025


 
World economic activity grew very modestly in August when seen through the lens of the Sales Managers Indexes for the world's three largest countries (China, the USA and India).

The overall Sales Managers Indexes for August show China at 50.7 and the US at 50.6. Only India, with a much smaller economy than China and the US, shows signs of significant economic growth, with an SMI reading of 52.9.

The main difference in the outlook for China and the US is suggested by the forward-looking Business Confidence Indicators, which read 53.1 for China, as opposed to a lowly 50.6 for the US.

China, US and India: All-Sector Business Confidence Indexes
Diffusion Index: 50 = ’no growth’
Global Growth Drivers Suggest a Dreary Outlook for the Rest of 2025


For most recent decades China, the USA and India have collectively contributed close to 60% of total global growth, and in reality, probably significantly more, as the "rest of the world" in this case includes many countries with less reliable and often exaggerated data. But given the importance of the USA, the trend of US Business Confidence (the growth inspiring "animal spirits") doesn't suggest the likelihood of a significant rise in global growth over the second half of 2025.

The overall Global Sales Managers Index for July was derived from a good headline performance from India, with an overall SMI reading of 53.2, an improved but still modest contribution from China (an SMI reading of 51.4), and a negative contribution from the USA (an SMI reading of 48.8).


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