Global business activity showed faint signs of recovery in June, according to the latest flash PMI data, with the eurozone, UK and US all reporting growth, albeit modest, across manufacturing and services. Yet behind the headline figures lie divergent regional trends. While the eurozone economy continued to stabilise and the UK posted its highest reading in three months, the US maintained its momentum, driven by a strong manufacturing rebound.

The HCOB Flash Eurozone Composite PMI held at 50.2 in June, indicating marginal growth for a sixth consecutive month. The S&P Global Flash UK PMI Composite Output Index rose to 50.7, a three-month high. Meanwhile, the S&P Global US Composite PMI Output Index dipped slightly from 53.0 to 52.8, well above the 50-point threshold that signals expansion.

Taken together, the results suggest that global business activity is advancing cautiously. Growth is not accelerating, but neither is it stalling. Supply chains have largely normalised, labour markets remain steady, and price dynamics continue to shift. Yet sectoral divides and region-specific risks continue to shape the recovery path.

Eurozone sees stabilisation amid lingering weakness

Eurozone private sector output grew marginally in June, driven by sustained manufacturing expansion and a stabilisation in services activity. The HCOB Eurozone Composite PMI Output Index held steady at 50.2, with the services sector flatlining and manufacturing output growing for the fourth month running.

Output increased modestly in Germany, reversing a slight decline in May, while France saw its tenth consecutive monthly contraction. Growth in the rest of the euro area slowed to its weakest since last November. The manufacturing PMI remained unchanged at 49.4, signalling continued contraction, although new orders in the sector stabilised for the first time in more than three years.

New business volumes across the region edged closer to stabilisation. Although still in decline, the fall in total new orders was the slowest in over a year. Export orders fell at their slowest rate since April 2022, with Germany recording a rise in foreign demand for the first time in nearly three-and-a-half years.

Employment edged higher overall, driven by modest hiring in services. Manufacturing payrolls declined at a faster rate than in May, particularly in Germany and France. Firms continued to reduce backlogs, although the pace of depletion was the weakest in over a year.

On the pricing front, input cost inflation softened for a fourth month. Service providers continued to face strong cost pressures, while manufacturers saw input prices decline for a third straight month. Output prices rose at a slightly quicker pace, with services inflation accelerating and goods prices falling again.

Manufacturers also pared back input buying, leading to further drawdowns in raw material stocks. Delivery times lengthened in June, ending a four-month period of supply chain improvement.

Business confidence strengthened to its highest level since January, led by an upswing in services sentiment and a still-positive outlook in manufacturing. French firms reported a notable rebound in optimism, matching sentiment levels in Germany.

Overall UK growth strengthens despite continued manufacturing contraction

UK private sector output rose for a second month in June, with the S&P Global Flash UK PMI Composite Output Index increasing to 50.7 from 50.3 in May. That marks the highest reading since March. However, the improvement masks contrasting performances across sectors.

The services sector continued to expand, with the activity index climbing to 51.3. In contrast, manufacturing output fell again, with the index at 47.1, a four-month high but still firmly in contraction territory. The broader manufacturing PMI reading of 47.7 marked a five-month high, but remained below the 50 threshold.

New business volumes returned to growth for the first time since last November, driven by improving domestic demand. However, export orders declined for an eighth consecutive month, weighed down by US tariffs, geopolitical uncertainty, and aggressive overseas competition. The rate of decline in goods exports eased, but the overall drag on manufacturing persisted.

Private sector employment fell for the ninth month running, with the pace of job cuts accelerating. Firms attributed reduced headcounts to excess capacity, pressure on margins, and hiring freezes. Cost pressures remained high, though input inflation slowed to a three-month low. Output charges rose at the softest rate since January 2021.

Business optimism slipped slightly from May’s six-month high, as firms flagged concerns over global volatility and the domestic political environment. That said, some businesses remained hopeful, citing investment in digital capabilities, new product launches, and potential gains from falling borrowing costs.

US manufacturing lifts as services cool

US business activity continued to grow in June, although the S&P Global Flash US Composite PMI Output Index edged down to 52.8 from 53.0 in May. The slight slowdown was driven by softer services performance, while manufacturing posted its strongest output increase in four months.

The US Manufacturing Output Index rose to 51.5, up from 49.4, marking a return to growth. The broader manufacturing PMI held steady at 52.0, matching May’s 15-month high. Services activity, while still expanding, eased to a two-month low of 53.1.

New orders rose for a fourteenth consecutive month, driven by domestic demand. However, exports declined, with services exports seeing the sharpest quarterly drop since late 2022. Stock building accelerated, as firms increased input purchasing at the fastest rate in over three years, often in response to concerns about tariffs and supply chain disruptions.

Manufacturers saw input and output prices rise sharply, with two-thirds of firms citing tariffs as a key driver. Service providers also reported significant price increases, though cost growth was slightly slower than in May. Across both sectors, the overall rise in prices charged was the second highest since September 2022.

Backlogs of work increased at the fastest rate in over three years, prompting the highest rate of job creation in 12 months for manufacturing and a five-month high in services. Inventory levels also jumped, particularly in manufacturing, with finished goods stocks seeing one of the largest rises in the survey’s 18-year history.

Business confidence eased slightly. Service firms remained cautious amid uncertainty over government spending plans, while manufacturers were more upbeat, buoyed by trade protection hopes.

Mid-year outlook demonstrates cautious confidence 

As the first half of 2025 draws to a close, the PMI data paints a picture of slow but resilient global expansion. Business activity in all three regions is growing, labour markets are mostly stable, and pricing dynamics continue to rebalance. Yet pockets of weakness remain.

The eurozone is still battling uneven demand and persistent contraction in some areas. France remains a laggard, while Germany is stabilising. The UK’s improvement is promising, but the manufacturing sector continues to contract and political uncertainty may cloud sentiment. In the US, tariff-related price pressures are building, and services momentum has cooled, even as manufacturing rebounds.

For CFOs and treasurers, the message is one of careful navigation. Growth opportunities exist, but are highly regional and sector-specific. Supply chains are generally functional, and some inflationary relief is emerging, particularly in services. But pricing strategies, workforce planning, and risk management remain complex.

The challenge now is to turn flickers of resilience into sustained recovery. With elections, trade disputes and policy shifts on the horizon, staying agile will be essential. If June’s data signals anything, it’s that global business is moving forward but the path ahead remains uneven, and momentum must be carefully managed.