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New US growth slips to four-year low.
At 51.4 in June, down from 52.9 in May, the Global All-Industry Output Index – produced by JPMorgan and Markit in association with ISM and IFPSM – posted its lowest reading in a year. The index has nonetheless remained in expansion territory throughout the past 47 months.
The weaker rate of increase signalled during June was mainly due to a sharp slowdown in global service sector growth, in turn largely the result of a marked deceleration in the US non-manufacturing industry. Subsequently, growth of US all-industry output eased to its weakest during its current near four-year sequence of expansion.
Rates of increase also eased in Japan, India, Brazil and Russia, while China fell back marginally into contraction territory. The eurozone downturn eased, as Germany eked out marginal growth and rates of contraction eased in France, Italy and Spain.
The UK and Ireland were brighter spots,seeing accelerated growth of output. Global service sector business activity has now increased continuously since August 2009, but the latest rate of expansion was the weakest since June last year. Although manufacturing production expanded at a similar pace to services output, this represented a mild improvement in the rate of growth to a three-month peak.
The level of incoming new orders increased further in June. However, similar to the trend in output, the rate of expansion in new business slipped to a ten-month low. New order growth slowed sharply in the US to a near four-year low. The big-four eurozone economies all reported lower levels of newbusiness, while China also saw a decrease.
The UK (78-month high), Japan (two-month low), India (50-month low) and Brazil all saw new business rise. Job creation was recorded for the ninth successive month in June. The rate of increase in staffing levels was the fastest since February, mainly as a result of improved growth in service sector payroll numbers.
In contrast, manufacturers reported a slight reduction in employment. Average input costs rose again during June, continuing a trend signalled since August 2009. However, the rate of increase in input prices during Q2 2013 was (on average) the weakest since the third quarter of 2009.
