May 25, 2022 14:47 GMT
Evidence for a slowdown in global growth mounted following Tuesday's flash PMI round for May.
- US PMIs came in weaker than expected (manufacturing 0.2 points lower, services 1.7 points lower), however, the UK was the real surprise here (manufacturing 0.4 points softer, services 5.2 points lower).
- May saw inflation pressures markedly cut demand for services in the UK, the US and Australia. For the UK, services slumped to a 15-month low and manufacturing at 16-month low on the back of a significant downturn in consumer demand.
- The 5.2-point downside surprise came after services had been running particularly hot over the past three months. The steep decline in demand echoes last week's UK GfK data, which saw consumer confidence at a fresh all-time low as recession fears loom.
- The Eurozone, Germany, France, Australia and Japan saw service industries remain strong on a continued tailwind of post-covid reopenings, accounting for the bulk of economic strength in May. Services boosted Japan's composite PMI to grow at the fastest in six months, with a substantial pickup in tourism a key accelerator.
Source: MNI/Bloomberg/S&P Global
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