For the first time since mid-2007, the advanced economies, including Japan, the U.S. and Europe, together are contributing more to growth in the $74 trillion global economy than the emerging nations, including China, India and Brazil, according to an estimate by investment firm Bridgewater Associates LP.
The turnabout may reshape world capital flows and upend forecasts that corporations had built around ebullient hopes for emerging markets.
The shift could create new challenges for companies with big global operations. Some are already feeling the pinch.
One sign emerging economies aren’t directly benefiting from the growth pickup in more mature markets: Emerging-market purchasing managers indexes, a proxy for GDP growth, hit their lowest level since early 2009, according to an aggregate gauge compiled by the economic consulting firm Capital Economics. The same measures for the U.S., Europe and Japan were expanding.
Consumer demand drove the past two U.S. expansions but has been modest in recent years, meaning slower growth in demand for foreign goods.
The U.S. expansion has benefited from domestic energy production, which creates demand for U.S.-made equipment. Stagnant U.S. wages mean lower relative labor costs. This U.S. expansion’s peculiarities are among indications that a long pattern, in which developed-world growth supported emerging-world exporters, could be breaking down in places like Asia.