Expansion signals were building worldwide before geopolitical tensions triggered fresh risks for inflation
The global economy was gathering pace at the start of 2026, with business activity indicators pointing to the strongest growth momentum in nearly two years — before escalating conflict in the Middle East introduced new uncertainty.
Fresh survey data from S&P Global Market Intelligence showed that the JPMorgan Global Composite PMI Output Index climbed from 52.6 in January to 53.3 in February, marking its highest level since May 2024 and signalling a notable acceleration in worldwide economic expansion.
The improvement reflected stronger output and rising demand across both manufacturing and services, suggesting that the global recovery was broadening following a period of uneven growth. The February reading also ranked among the most robust seen since the pandemic-era rebound, underlining how business confidence and activity had begun to strengthen in multiple regions.
According to the report’s author, productivity gains were playing an important role in lifting performance. Chris Williamson wrote that the surveys pointed to “an acceleration of worldwide economic growth prior to the outbreak of the Middle East war,” highlighting how firms were benefiting from improved efficiency and rising new orders.
Manufacturing provided a meaningful boost to the composite figure, with factory output and order volumes improving in February. At the same time, service-sector activity remained resilient, helping to sustain overall momentum in the global PMI reading.
However, the positive trajectory was quickly overshadowed by geopolitical developments. The outbreak of conflict in the Middle East has heightened concerns about energy costs, supply chains and inflationary pressures — all factors that could dampen business sentiment and slow economic expansion in the months ahead.
Market watchers note that geopolitical shocks have historically disrupted growth cycles by pushing commodity prices higher and creating financial volatility. The latest data therefore captures what may prove to be a short-lived window of strengthening economic conditions before downside risks intensify.
While February’s PMI readings suggest that global demand and output were improving across many sectors, the outlook has become increasingly uncertain. Rising geopolitical tensions now pose a key threat to the recovery narrative that had begun to take shape early this year.
With productivity improvements and stronger orders driving expansion at the start of 2026, the global economy appeared poised for firmer growth. Whether that momentum can be sustained will depend largely on how the conflict evolves — and how policymakers and markets respond to the emerging risks.
