Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
The global economy expanded modestly in June 2025, with key indicators showing slight improvements in output, new business, and employment, according to the latest J.P. Morgan Global Composite PMI survey compiled by S&P Global in partnership with ISM and IFPSM.
The Composite Output Index rose to a three-month high of 51.7 in June, up from 51.2 in May. While this reflects continued expansion—any figure above 50 indicates growth—the pace remains below long-run averages and is the weakest quarterly performance since the fourth quarter of 2023.
India led the global upturn in June, followed by the United States. Modest growth was also recorded in Japan, the UK, Australia, mainland China, and the euro area.
However, output contracted in Germany, Russia, and Brazil. The euro area, in particular, continued to underperform.
The services sector maintained its lead over manufacturing, with the Global Services Business Activity Index at 51.9, compared to 51.3 for manufacturing output. Financial services drove the expansion in services, reaching a six-month high, while growth in business services slowed.
Employment rose globally for the second consecutive month, with the strongest job gains in the service sector. However, manufacturing saw job losses for the eleventh month in a row. Notably, China, Germany, the UK, France, and Russia all reported employment cuts.
Business optimism weakened further, with sentiment dropping to one of its lowest levels since mid-2020. The US and China both registered declines in confidence, while Japan, Australia, and the euro area (on average) recorded marginal improvements.
Price pressures also moderated. Input cost and output price inflation both eased in June after picking up in May. Inflation was more pronounced in developed markets such as the US, the euro area, and Japan, while China recorded declines in both input and output prices.
Despite the softer overall sentiment, the survey signalled some resilience heading into the second half of 2025. “The global all-industry output PMI recovered another 0.5-pt to 51.7 in June, rising to a level consistent with above-trend 2.6% annualised global GDP growth,” said Maia Crook, Global Economist at J.P. Morgan.
“However, we continue to expect a material slowdown in the coming months as the front-loaded boost to production earlier this year unwinds and drags from US tariffs and related policy uncertainties begin to bite”
