Manufacturing growth slows around the world as China’s Covid-19 lockdowns and war in Ukraine disrupt supply chains and keep inflation at the highest level in recent years; In addition, the growing risk of recession in the United States poses a new threat to the world economy.

Factory activity indicators released in major economies weakened in June, with US producers reporting the first total drop in new orders in two years as consumer and business confidence faltered.

The S&P Global composite PMI output index in the US, which tracks the manufacturing and services sectors, fell to 51.2 points this month from a final reading of 53.6 in May and the slowest pace of growth in five months.

The manufacturing component fell to 52.4 points, the lowest in almost two years, from 57 points in May.

“Business confidence is now at a level that would normally herald an economic downturn, increasing the risk of a downturn,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

Meanwhile, in the euro zone, the manufacturing PMI fell to 52.0 points in June after rising to 54.6 last month. This represented the lowest figure since August 2020, when it stood at 51.7 points.

For its part, the German economy suffered a sharp loss of momentum at the end of the second quarter, with falling exports acting as a drag and economic uncertainty and inflation weighing on domestic demand.

The S&P Global services PMI fell to 52.4 points in June from May’s final reading of 55.0, but still broke above the 50 mark, denoting expansion, for the sixth straight month. Analysts had expected a drop to 54.5 points.

The flash manufacturing PMI fell to 52.0 from May’s final reading of 54.8 and lower than a Reuters poll forecast of 54.0.

Britain showed signs of stalling as high inflation hits new orders and businesses report levels of concern that normally herald a recession.

The Composite PMI stood at 53.1 in June, unchanged from May and above the median forecast of 52.6 in a Reuters poll.

However, the measure of new orders fell to 50.8 points, the lowest in more than a year. Factory orders fell below the growth threshold of 50.0 to 49.6 points.

Eurozone PMI figures showed a further slowdown in the services sector, while output in the manufacturing sector appears to be falling off altogether,” said Jack Allen-Reynolds, senior economist at Capital Economics.

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