Three examples today allow us to make the comparison. First the multi-national agency: today's International Monetary Fund estimates update pulled back 2014 global growth forecasts to 3.4% with the US and Russia having noteworthy downward revisions (whilst Japan and the UK went the other way).
3.4% still sounds like a reasonable clip. By contrast 2.5% is potentially below medium-term global growth trends. This latter statistic is where the mining and construction equipment Caterpillar place global growth rates for 2014...identifying the developing economies as the source of any dullness in this numbers (which reflects their own sales generation trends):
For our third contender we have to look to Germany and the global chemicals concern BASF who state in their quarterly corporate earnings disclosures today that:
'We have reduced some of our expectations for the global economy in 2014 (previous forecast in parentheses):
Growth of gross domestic product: 2.5% (2.8%)'
So another tick in the box for the corporate derived 2.5% camp.
Who to believe? Well I think it is no accident that both Caterpillar and BASF have struggled with changing demand patterns in some of their end markets over recent months. Caterpillar has succeeded in pushing through price increases but at the cost of sales whilst for BASF the corporate outcome during the second quarter was the other way around. Simply put it has not been east for either company despite high market shares in their respective businesses.
Statistically the IMF is by no means flawless but I would expect the global growth number for 2014 to be closer to their estimate than the two corporate sources noted above given we are now nearly a month into the third quarter. Here's the issue however: the IMF's economic growth number is factored into hopes already so when large and global industrial concerns say it is tougher for them at the moment then there will be pressure for another revision. Markets being momentum driven in the shorter-term ("voting machine") will not necessarily like such a revision just as they sold down Caterpillar and BASF shares following their earnings pronouncements today.
Either that or the global economy is shifting quickly in favour of the Google's and Facebook's of this world...