London (CNN Business) Supply chain bottlenecks are weighing on economic growth in Europe. The same problem is hitting China as it battles an energy crunch and concerns about its huge real estate sector. And in the United States, factories can't produce as much as they'd like due to shortages of workers.
What's happening: Recent data makes clear that the world's major economic engines are losing steam, generating uncertainty about the strength of the coronavirus recovery.
The latest warning came Friday, when data provider IHS Markit released its Purchasing Managers' Index, a closely-watched gauge of economic health, for the 19 countries that use the euro.
The survey found that business activity in the region "slowed sharply to a six-month low in October" as snarled supply chains hit the manufacturing sector. Spending on services — a category that includes dining out, going to the movies and transportation — also took a hit due to "ongoing Covid-19 concerns."
"A manufacturing sector beset with supply chain delays saw production growth falter to the lowest [level] since the first lockdowns of last year," said Chris Williamson, IHS Markit's chief business economist. "The services sector has meanwhile seen some of the summer rebound fade just as resurgent virus case numbers bring renewed concerns."
Step back: For months, economists have argued that while supply chain problems are frustrating, they are outweighed by rocketing demand from shoppers who saved up during the pandemic. But the situation is starting to have a real impact on sentiment. IHS Markit found that in Europe, optimism in manufacturing hit its lowest level in a year due to concerns about securing parts.
The October PMI reading for the United States arrives later Friday.
There's more: The worrying data in Europe comes days after China — the only large economy to avoid recession in 2020 — said that its economic output is growing at the slowest pace in a year.
The country has been hit by shipping delays and mounting inventories, while an energy squeeze is denting factory production and leading to power cuts in some areas. Pressure is also building on China's heavily-indebted real estate sector, which accounts for as much as 30% of GDP.
Meanwhile, the Federal Reserve said this week that US industrial production dropped 1.3% last month, as plants struggled with shortages of materials and qualified workers as well as the aftermath of Hurricane Ida.
Bringing it all together: It's hard to look at these developments without wondering whether economists are still too rosy about the state of the global economy. They remain cautious, but largely unfazed. In a recent update of its economic projections, the International Monetary Fund said it expects the world economy to grow 5.9% in 2021, just 0.1 percentage points lower than its July forecast. The outlook for 2022 remained unchanged.
"We've had a dramatic economic rebound, and that rebound is now transitioning to a recovery that's happening at a slower pace," Jeffrey Sacks, head of investment strategy for Europe, the Middle East and Africa at Citi Private Bank, told me.
Big picture: The global economy, following a massive crash, looks incredibly strong by historical standards. But when prices start rising significantly at a moment of slowing economic growth, Wall Street and policymakers need to monitor the situation closely.