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Executive Summary

  • We expect to see a meaningful pickup in global growth in the second half of 2021 as economies continue to reopen; however, we are cautious about extrapolating short-term cyclical boosts into a presumption of a higher secular trend rate of growth or inflation.
     
  • In the US, we expect growth in the service sectors to continue to disappoint relative to consensus expectations; meanwhile, growth in the manufacturing and construction sectors will be muted as the recovery there is already complete.
     
  • We expect the European growth rebound to kick into high gear in the second half of the year as the vaccination drives across the continent approach herd immunity toward the end of the third quarter and workers currently on furlough and related schemes rejoin the labour market.
     
  • Having been boosted by an early recovery post-COVID-19, we expect growth in China to trend back to its long-term average.

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