After experiencing softness earlier this year, the global economic outlook is showing more strength and is expanding at a “moderate pace,” according to the latest read by IHS Global Insight’s chief economists.
This is good news for fashion apparel retailers, luxury firms, beauty companies and other industry players who have been experiencing weaker sales in key markets — and the negative impact of a strong dollar as well.
Nariman Behravesh and IHS senior research director Sara Johnson said in their June report that global real gross domestic product growth should “slow from 2.7 percent in 2014 to 2.6 percent in 2015 (mostly because of a temporary, weather-related and trade disruption slump in the U.S. economy in the first quarter), before picking up to 3.3 percent in 2016.”
The economists said in their report that “many of the world’s developed economies, the basis for a solid and gradually accelerating recovery remains in place.”
In Europe, “growth is improving, despite storm clouds,” the researchers noted adding that real GDP gained 0.4 percent in the first quarter with “notable improvements in Spain and France. Consumer spending accelerated in the first quarter, as lower energy prices boosted purchasing power. Investment growth strengthened in a number of countries, helped by easing credit conditions and rising business confidence.”
In the U.S., a weak first quarter was followed by a rebound, and real GDP is “set to increase at rates of 2.1 percent in the second quarter and 3 percent in the second half.”
The economists said the “strong 280,000 payroll job gain in May is confirmation the first-quarter slump was an anomaly. Consumer spending will remain the mainstay of the economy, and housing construction will also contribute to growth. The major drag on growth will come from net exports, because of a strong dollar.”
And despite a recent bottoming out in the Chinese stock market, there are “early signs of stabilization, as stimulus takes effect,” the economists said adding that Chinese “authorities have undertaken fiscal and monetary stimulus measures to boost growth and to alleviate the drag from high debt levels.”