Global economic growth slowed for a third month running in June, according to PMI data. The JPMorgan Global PMI", compiled by Markit, sank to its lowest since January, to signal a rate of global GDP growth of approximately 2% pa. Developed world growth hit the weakest since January, though remained solid. The same cannot be said for emerging markets, which saw the steepest downturn for just over six years.

US, UK and eurozone drive global upturn

Solid growth continued to be recorded in the US and UK, the former seeing a slowdown but once again driving the global economy due to its sheer size. Stronger growth in the eurozone added to the developed world upturn. Japan saw moderate growth but the pace of expansion slowed to near-stagnation in China, adding to signs of ongoing weakness in Asia. The deepening downturn in Brazil is also a growing concern.

Impact of escalating euro crisis so far limited to Greek economy

The crisis in Greece took it's toll on its economy, with the PMI signalling the steepest drop in output for two years. Worse is likely to come as capital controls were imposed after talks with Greece's creditors broke down and a referendum rejected austerity, raising the chances of Greece's exit from the euro. However, PMI surveys for other euro countries remained robust, and the region as a whole grew at the fastest rate for four years.

Manufacturing woes drive ongoing weakness in China and Japan

Japan managed to muster another month of moderate growth in June, according to the Nikkei PMI surveys. But policymakers will be worried that manufacturing looks to be in a renewed downturn despite the weakened yen. China's factories are also struggling, offsetting service sector growth, with weak orders (especially for exports) causing firms to cut employment at the steepest rate since 2009.

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