Global economic growth slowed in June but remained the second-strongest in just over a year, according to Purchasing Managers’ Index (PMI) data, signaling a further robust expansion in the second quarter of 2024 after the slowdown in late 2023. In June, growth in the U.S. slightly accelerated amidst a broader slowdown in developed countries. Meanwhile, India continued to lead the emerging markets by a wide margin.
Global growth became more even in June, with all 25 sub-sectors covered by the PMI reporting stable or rising output for the first time in three years. Despite global economic growth showing signs of recovery, business expectations for the year ahead fell to the lowest in seven months due in part to political uncertainty surrounding elections in India, the U.K., and France, as well as the upcoming presidential election in the U.S.
Global growth cools
S&P Global Market Intelligence’s PMI surveys indicated that global economic growth expanded for the 8th month straight in June. However, the rate of expansions slowed slightly compared to May but remained the second-highest in the last 13 months.
The headline JPMorgan PMI, covering manufacturing and services in over 40 economies, fell from 53.7 in May to 52.9 in June. The PMI in June is broadly consistent with global economic growth, which recorded an annualized rate of 3 percent in June, with a 3 percent rate on average for Q2 of 2024 as a whole.
Price pressures remain high
Amid a slowdown in global economic growth, price pressures remained high globally, according to PMI survey data, as cost pressures in the manufacturing sector countered the decline in the service sectors of most major economies. The manufacturing sector remains a challenge in efforts to tame inflation, which in many economies remains high compared to central bank targets.
Worldwide PMI survey data compiled by S&P Global for J.P. Morgan revealed that average prices charged for goods and services rose globally at the slowest rate since January, registering the second-weakest monthly rise since October 2020.
The composite PMI Prices Charged Index fell from 53.2 in May to 52.8 in June but remained above the pre-pandemic decade average of 51.2. However, this month’s data signals a slowdown in inflation in the coming months. In addition, the recent PMI readings are consistent with global CPI inflation of roughly 3.5 percent, down from the latest estimate of 4.5 percent.
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U.S. and India buck global trends
As global economic growth signals recovery, the U.S. defied the broader developed world slowdown, with its output growing at the fastest pace since April 2022. U.S. services activity growth hit a 26-month high, offsetting cooler manufacturing growth.
Meanwhile, economic growth slowed in Europe. While output rose in the eurozone for the 4th straight month, the rate of increase slowed sharply amid declining output in France and near-stalled output in Germany.
In emerging markets, mixed growth trends were evident in June. India again led the four BRIC economies by a wide margin, with growth accelerating from an election-related dip in May to one of the strongest levels over the past 14 years. Faster growth was recorded in both the goods and services sectors.
Meanwhile, growth slowed in mainland China but still registered one of the strongest expansions over the past year. Manufacturing output in China rose at the fastest rate for two years, helping counter the slowdown in services activity.
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