The United States appears to be bearing the brunt of its own tariff policy, with new data showing that business activity in the country slowed in June, while global growth indicators surged. A Moneycontrol analysis of Purchasing Managers' Index (PMI) data reveals that while most major economies recorded improved performance, the US experienced a marginal dip in momentum.
The US composite PMI, which includes manufacturing and services activity, slipped to a two-month low of 52.9 in June, down from 53.0 in May, according to S&P Global. In contrast, global business activity reached a three-month high of 51.7, up from 51.2 the previous month.
“The upturn in June was led by India,” noted a JP Morgan release on July 3.
India’s composite PMI rose sharply to a 14-month high of 61.0 in June, from 59.3 in May, driven by strong growth in both manufacturing (58.4) and services (60.7).
Other major economies also saw a rebound. The UK’s PMI hit a nine-month high of 52.0, up from 50.3 in May. China, a key US competitor, returned to expansion territory in May, with its PMI rising to 51.3 from 49.6.
Japan and Australia both saw their indices rise to multi-month highs, suggesting a broad-based global recovery.
The outliers were some BRICS nations: Brazil, Russia, and South Africa all registered slight slowdowns in activity.
Outlook Remains Clouded
Despite the upbeat June numbers, analysts caution that the months ahead could prove challenging.
“The PMIs broadly signalled resilience and even building momentum into midyear. However, we continue to expect a material slowdown in the coming months as the frontloaded boost to production earlier this year unwinds and drags from US tariffs and related policy uncertainties begin to bite,” said Maia Crook, global economist at JP Morgan.
Across most economies, sentiment on future output remains subdued.
“Recently, major macroeconomic indicators have shown divergence, with consumption in certain sectors increasing beyond expectations, while the momentum of growth in investment and industrial production has weakened. Market participants’ expectations remain weak,” said Wang Zhe, senior economist at Caixin Insight Group, commenting on China's trends.
In India, although current performance is robust, optimism among services firms has dropped to its lowest since mid-2022.
The US tariffs—announced under President Donald Trump—are due to officially expire on July 9, with letters being issued from July 4 and new higher rates becoming applicable from August 1.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
