The pace of global economic growth slowed for a second successive month in December as further waves of coronavirus disease 2019 (COVID-19) infections curtailed activity and hit demand. Optimism about the year ahead also fell amid intensifying concerns over the spread of the virus, subduing employment growth. European economies were the hardest hit, but robust - albeit slower - expansions continued to be recorded in India, the US, China and Brazil.

The JPMorgan Global PMI™ (compiled by IHS Markit with data collected 4th-21st December) edged down from 53.1 in November to 52.7 in December, its lowest since September.

Global service sector growth again suffered amid new lockdown measures in many markets, led by further steep falls in tourism, recreation and transportation services. Although the service sector as a whole continued to expand, the rate of increase was the weakest since September, with inflows of new business rising at the slowest pace since August.

The dent to confidence, alongside new COVID-19 restrictions in some markets, nonetheless took its toll on hiring. Having hit a one-and-a-half year high in November, global employment growth fell close to stagnation in December, stalling in manufacturing and registering only a modest rise in the service sector.

The decline indicates that the pace of global economic growth slowed for a second month running, as rising COVID-19 cases dampened activity and demand, though output is still indicated to have risen over the fourth quarter as a whole, further recovering from the unprecedented downturn seen in the first half of 2020.

Manufacturing meanwhile showed encouraging resilience in the face of rising COVID-19 infections, with global output growth easing only slightly from the near-decade high seen in November. The strength of the recent manufacturing expansion led to supply chain constraints, often linked to shipping shortages, which in turn limited production in some cases and accounting for at least some of the slowdown in overall manufacturing growth.

Worse may be yet to come, however, as virus-fighting restrictions look set to tighten further in the coming weeks, reinforcing expectations of a slow start to 2021 for the global economy.