Global PMI sags in June as new order growth tapers off

By IBTimes Staff Reporter | July 06 2010 2:16 PM

The pace of global expansion in the private sector sagged in June to a four-month low, according to a survey on Tuesday that pointed to slowing growth in order books and employment.

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The Global Total Output index, produced by JPMorgan with research and supply management organizations, fell to 55.4 in June from 57.0 in May, although still above the 50 mark that divides growth from contraction.

The Global Services index eased to 54.9 in June from 56.3 in May, pulled down by a new business component that saw a marked fall to 52.6 from 54.2. The survey also showed employment barely grew last month.

Although the global service sector expanded at a solid pace through Q2 2010, the June PMI data provided further evidence that growth of activity and new orders are starting to taper off, said David Hensley at JPMorgan.

This is also being felt in the labor market, based on the decline in the PMI employment index.

On Tuesday, a national PMI survey showed the U.S. service sector growing in June for a sixth straight month but the rate of growth slowed more than expected and hit its lowest since February.

Signs of a slowdown were also in evidence in the 16-nation euro zone, according to surveys on Monday that suggested private sector growth may have already peaked in the second quarter.

The global index combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia.

(Reporting by Andy Bruce; Editing by Susan Fenton)