n an unusually pronounced trend, the IHS Markit Purchasing Managers Index (PMI)(tm) report for August reveals the global pharmaceutical and healthcare sectors ranked first and second respectively for output growth. What is uncommon about this development is the synchronicity. In recent years, during and prior to the coronavirus disease (COVID-19) pandemic, it has not been unheard of for one or other of these sectors to hold the macroeconomic top spot occasionally and briefly. However, often there has been a type of dichotomy, with either healthcare services or the pharmaceutical and biotechnology sector in the ascendant and the other suffering a relative decline in output or at least far slower growth. More unusual still is the consistency with which pharma and healthcare have appeared at the top of global and regional PMI reports for the United States, Europe, and Asian regions in 2021.
Analysis of IHS Markit PMI data indicates that the US healthcare sector posted faster output growth than all other economic sectors in June and stood out as the only US economic sector to avoid a slowdown in growth in May. The performance was driven by strong demand across both healthcare and pharmaceutical, biotech, and equipment supply chains and upturns in payroll numbers on the jobs front in US healthcare.
In July, pharmaceuticals and biotechnology output in Europe experienced its joint-fastest rate of growth since the COVID-19 virus pandemic began, while European healthcare services rose 12 places in the macroeconomic rankings to the second position with the fastest rate of business activity growth for 23 years.
Now, the August global PMI report shows that pharmaceuticals and biotechnology leapt 10 places in the industry ranking. And in the same month, in the Asia region, pharmaceuticals underwent the strongest rate of output expansion since mid-2020, continuing a six-month uninterrupted trend of growing output expansion, and overtaking three financial sub-sectors in the growth rankings in the process.
What the latest PMI readings indicate is an unprecedented simultaneous increase in global pharmaceutical and healthcare business expansion. Output is on the crest of a wave that has been driven by a combination of COVID-19-related healthcare and increasing demands for other postponed treatments and delayed diagnoses. Having bucked the sharp slowdowns experienced by other major macroeconomic sectors in Europe and North America – as well as surging demand as rising vaccination rates and ending COVID-19 lockdowns lifted sentiment and demand among businesses and consumers – 2021 is shaping to be a record-breaking year overall for both the pharmaceuticals and biotechnology sector and healthcare services. The general picture from the PMI report heading into the fourth quarter is that the US healthcare sector is likely to continue to experience a faster pace of growth than other regions, while there are encouraging signals that European pharmaceutical manufacturing capacity will continue to lead the way.
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