US and China are driving the global recovery with Europe lagging

The global manufacturing Purchasing Managers Index (PMI) rose to a ten-year high of 55.0 in March 2021, which indicates that world industrial production has continued to recover (Chart 1). That is no surprise, given that both the US and China are experiencing strong economic recoveries that are helping to drive the global economy. In addition, consumers confined at home have been busy ordering goods and services online for both work and recreation, which has boosted demand for various manufactured goods. The manufacturing PMI does not tell the whole story, since it ignores the services sector, which is particularly important in…