Global PMI upturn cools from 1-yr high; India tops 4 in BRIC in growth

Mixed growth trends were evident across emerging markets in June, with India again leading the four BRIC economies by a wide margin, according to S&P Global Market Intelligence. India’s growth re-accelerated from an election-related dip in May to one of the strongest seen over the past 14 years. Faster growth was recorded for both goods and services.

Growth also ticked higher in Brazil, sustaining the strong expansion seen over the year to date. Manufacturing there recovered from the near-stalled picture witnessed in May.

In contrast, Russia reported a marginal contraction of output, suffering its first decline in 17 months, as a steepening fall in services activity offset a sustained robust gain in manufacturing, S&P Global Market Intelligence said in a note.

Growth also slowed in China in June, albeit merely paying back some of the strong gains seen in May to still register one of the strongest expansions seen over the past year. Manufacturing output rose at the sharpest rate for two years, helping counter a marked slowing in services activity.

Global economic growth slowed in June, but remained the second-strongest seen for just over a year, according to purchasing managers’ index (PMI) data, pointing to a further robust expansion in the second quarter (Q2) this year after the slowdown seen in late 2023.

June saw a further slight acceleration of growth in the United States, bucking a broader developed world slowdown.

Global growth, meanwhile, became more broad-based, with all 25 sub-sectors covered by the PMI reporting stable or rising output in June for the first time in three years.

Business expectations for the year ahead fell to the lowest for seven months, in part linked to political uncertainty surrounding elections in India, the United Kingdom and France, as well as upcoming presidential election in the United States.

S&P Global Market Intelligence's PMI surveys indicated that the global economy expanded for an eighth consecutive month in June. The rate of growth slowed slightly compared to May but remained the second-highest seen over the past 13 months.

The headline JPMorgan PMI, covering manufacturing and services in over 40 economies, fell from 53.7 in May to 52.9.

Output fell in Canada, having risen briefly in May for the first time in a year. Japan also slipped back into decline. Although only marginal, the downturn was the first recorded for seven months.

Growth slowed in Europe. While output rose in the eurozone for a fourth month, the rate of increase slowed sharply amid declining output in France and near-stalled output in Germany.

The United Kingdom reported an eighth successive monthly expansion, though growth slowed in both manufacturing and services to result in the weakest upturn so far this year, albeit partly blamed on a pause in spending ahead of the upcoming election, the note said.

Looking ahead, near-term global prospects darkened in June. Business expectations about the year ahead fell to a seven-month low, waning in both manufacturing and services.

Sentiment deteriorated, especially sharply in India following the elections, but also slumped in Europe. A small dip in confidence was also seen in the United States.