Monthly PMI Bulletin: July 2024

Global expansion sustains, but outlook clouded by elevated inflation and political uncertainty

The global economic expansion slowed in June but remained the second-strongest seen for just over a year according to PMI data. The latest surveys indicated that growth remained robust, though business confidence cooled amidst still-elevated inflation and political uncertainty.

The J.P.Morgan Global PMI Composite Output Index – produced by S&P Global – fell to 52.9 in June from 53.7 in May. Historical comparisons indicate that the PMI is broadly indicative of the global economy growing at an annualized rate of 3.0% in June, with a 3.0% rate also signalled on average for the second quarter of 2024 as a whole.

The latest easing in global growth momentum was underpinned by softer expansions in both the manufacturing and service sectors. Growth was again services-led for a seventeenth month in a row, although factory output growth also remained among the strongest seen in the past two years, altogether reflecting robust performances.

That said, the trend exhibited by the PMI Future Output Index, the survey’s only sentiment-based sub-index which also serves as the confidence indicator, pointed to the lowest level of optimism for seven months. Alongside softer new orders expansion, the latest data suggest that slower growth may ensue.

Turning to prices, still-elevated inflation remained a lingering theme with slower service sector inflation partially offset by rising price pressures in the goods producing sector. The latest composite PMI Prices Charged Index is indicative of global CPI hovering around 3.5%, thereby indicating sustained uncertainties surrounding monetary policy outlooks. Flash PMI figures for July will be due July 24 for further insights on both the trends for growth and prices.

Source: S&P GLOBAL – by Jingyi Pan
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