July 5, 2012 / 3:34 PM / 7 years ago

World economy flirts with stagnation in June -PMI

LONDON (Reuters) - The global economy managed little better than stagnation last month, dragged down by weak manufacturing and clear signs the U.S. economy is slowing, a business survey showed on Thursday.

JPMorgan’s Global All-Industry Output PMI fell to 50.3 in June from 52.1 in May, and showed order books of companies across the world filled at a slower rate last month.

Readings above 50 signify growth.

“The PMIs suggest that the global economy downshifted into neutral gear in June,” said David Hensely, economist at JPMorgan.

“Output and new order inflows were only marginally above stagnation levels, signalling that global GDP growth over Q2 2012 as a whole will be the most sluggish for around three years.”

Its services index fell to 50.6 in June from 52.5 the previous month, as the rate of expansion among service sector businesses in the U.S. ebbed to a two-and-a-half year low.

Both all-industry and services PMI suggested inflation pressures are starting to abate, however.

Reporting by Andy Bruce. Editing by Jeremy Gaunt.

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