Overview
- Final May PMIs show a clear split in private‑sector demand with India and China strong and most advanced economies weakening; India's services PMI rose to 59.8 and China's private services PMI climbed to 54.4.
- Japan's services activity flatlined at 50.0 and Australia’s services PMI fell to 48.7 while the eurozone composite PMI was 48.5, readings that point to likely second‑quarter weakness and a possible eurozone GDP decline of about 0.2% quarter on quarter.
- Surveys cite the Middle East war as the main driver of rising input costs, with higher oil, fuel and shipping costs transmitted through supply chains and raising prices for firms and consumers.
- Manufacturing in some countries is propping up the composite PMIs because firms are building inventories and front‑loading orders as a precaution, a tactic that survey authors warn could fade if new orders slow.
- The data tighten policy choices for central banks and hurt workers and households as services hiring cools and businesses pass higher costs to customers or cut staff, prompting measures such as Japan’s supplementary budget to cushion fuel and utility bills.