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Flash PMIs Show Asia Driving Growth as Europe’s Services Weigh on Activity

Lower oil prices after a US‑Iran memorandum have eased input cost pressures and left central banks facing a tough trade‑off between inflation and uneven growth.

Garment workers stitch clothes at a textile factory in Noida, India, July 31, 2025. REUTERS/ Bhawika Chhabra
Workers walk between precision-machining machines for automotive parts inside a factory at Kyowa Industrial Co. in Takasaki, Gunma Prefecture, Japan April 11, 2025.  REUTERS/Issei Kato
A man amends a menu at a restaurant in Tower Hamlets, London, Britain, May 3, 2026. REUTERS/Jack Taylor
The skyline of the banking district is seen during sunset in Frankfurt, Germany, April 21, 2024.  REUTERS/Kai Pfaffenbach

Overview

  • Flash PMI readings released on June 23 show Japan’s manufacturing PMI strengthened to 54.9 and new orders rose at the fastest pace in more than four years, driven in part by stock building over Middle East supply fears.
  • India’s private sector remains robust but cooled to a three‑month low with HSBC’s composite PMI at 57.4 and slower new orders and weaker business confidence reducing momentum.
  • The euro zone’s flash composite PMI rose to 49.5, marking a third straight month below the 50 no‑change mark and signalling a modest easing of contraction rather than clear expansion.
  • Germany’s composite PMI plunged to 48.0, its fastest pace of private sector decline in 18 months, as services weakness and falling new business increased the risk of quarterly economic contraction.
  • Surveys show war-related fuel and shipping costs prompted precautionary stock‑building across regions but input price pressures have eased after lower oil prices, creating a fragile window for policy makers to balance disinflation and growth risks.