Page 16 - Policy & Economic Report - July 2025

POLICY AND ECONOMIC
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growth path despite recent geopolitical disruptions. Emerging market economies generally outperformed
advanced economies, with India recording the strongest expansion among all economies covered by the
survey, followed by Ireland, China and Japan, reflecting the continued resilience of domestic demand in
several Asian economies.

Figure 6: J.P. Morgan Global Composite PMI Output Index

Source: J.P. Morgan; S&P Global PMI

The latest S&P Global Flash PMI surveys indicate that business activity across the four largest advanced
economies—the United States, Eurozone, Japan and the United Kingdom (G4)—accelerated for the
second consecutive month during July, reaching its fastest pace since November 2025. Growth recovered
from the slowdown experienced during March–June following the escalation of the conflict in the Middle
East, supported by resilient domestic demand and improving services activity. Although manufacturing
continued to outperform services for the seventh consecutive month, the gap narrowed as services
activity strengthened, suggesting a gradual rebalancing of global business activity after manufacturing had
led the recovery during the initial stages of the Middle East conflict.

Among the advanced economies, the United States remained the strongest performer, recording the
fastest expansion in business activity since November 2025. Japan followed closely, registering its
strongest manufacturing production growth since 2014. The Eurozone and the United Kingdom also
returned to expansion after weak or stagnant conditions in June, reflecting improving domestic demand
and business confidence. At the global level, however, the survey also showed that international trade
remained subdued despite stronger domestic demand, indicating that the recovery continued to be driven
primarily by local market conditions rather than external demand. New business increased at the fastest
pace in four months, with investment goods producers recording the strongest expansion among the
sectors covered by the survey.

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