Page 15 - Policy & Economic Report - July 2025

POLICY AND ECONOMIC
ROEILPO&RGTAS MARKET

Figure 5: Monthly Trade Policy Uncertainty Index & Global Geopolitical Risk Index

July 2026 Source: UNCTAD – Trade and Development Foresights 2026

Trade policy uncertainty remained one of the principal risks to the global outlook. According to UNCTAD,
uncertainty surrounding tariffs, industrial policies and geopolitical developments has remained
significantly above historical norms, prompting firms to reassess sourcing strategies and diversify
production networks. Businesses are increasingly pursuing regionalization, friend-shoring and supplier
diversification to reduce dependence on vulnerable trade routes and improve resilience against future
geopolitical shocks. These structural adjustments are reshaping global value chains and influencing long-
term investment decisions across manufacturing and logistics.

Global trade patterns are also being reshaped by the rapid expansion of technology-intensive industries.
Continued investment in artificial intelligence (AI), semiconductors, cloud computing infrastructure and
data centers has supported strong demand for advanced electronics, machinery and critical minerals,
partially offsetting weaker trade in several traditional manufacturing sectors. Economies integrated into
global technology value chains have continued to outperform, while businesses increasingly prioritize
resilient sourcing strategies and investment in digital infrastructure to strengthen long-term
competitiveness.

Global Manufacturing and Business Activity

Global manufacturing and business activity remained resilient during June–July 2026, despite continued
geopolitical tensions, elevated trade uncertainty and renewed volatility in energy markets. According to
the J.P. Morgan Global Composite PMI, global business activity accelerated to a four-month high, with the
Global Composite Output Index rising to 52.0 in June, marking the 41st consecutive month of expansion.
Growth was supported by stronger new business, improving business confidence and continued
expansion in both manufacturing and services, indicating that the global economy remained on a steady

Page | 14