(Repeats column that ran on Wednesday, with no changes)
* Chartbook: https://tmsnrt.rs/2FRkIhj
By John Kemp
LONDON, July 3 (Reuters) - Global manufacturing and construction sectors have already entered a downturn; the service sector is all that now stands between the economy and a full-blown recession.
Global manufacturers reported new export orders fell for a 10th month running in June, with the most widespread decline for six years, according to the JPMorgan global purchasing managers survey.
Even in the United States, which has escaped relatively mildly so far from the downturn hitting Europe and Asia, there are now clear signs growth has stalled across the manufacturing and construction industries.
U.S. manufacturers reported only a small increase in activity in June, with the net positive balance the lowest for almost three years, according to the Institute for Supply Management (https://tmsnrt.rs/2FRkIhj).
U.S. manufacturers’ new orders have been decelerating for more than a year and were flat for the first time since the end of 2015, which suggests activity is likely to slow further in the short term.
Durable goods orders for non-defence capital equipment excluding aircraft were up by just 2.1% in the three months from March to May compared with a year earlier, less than a third of the growth rate a year ago.
Private sector construction activity is falling, with the value of new buildings and structures put in place down by 4.1% in the three months from March to May compared with the same period a year earlier.
Residential construction activity was down by more than 8% year-on-year in the three months from March to May, according to the U.S. Census Bureau.
Private non-residential construction was still up by 1.5% year-on-year between March and May, but the growth rate has slumped from more than 5% between August and October.
RATES TUMBLE
Reflecting interest rate traders' recession fears and expectations of rate cuts, the U.S. Treasury yield curve for securities with maturities between three months and 10 years has been continuously inverted for more than a month.
Since 1960, sustained yield-curve inversions lasting for three months or more have been one of the most reliable signals of an impending recession arriving within the next 12 months.
Yields on benchmark U.S. Treasury 10-year notes have already sunk to 1.95%, down from 3.20% just eight months ago, and the lowest since November 2016, as investors seek a safe haven from a feared slowdown.
Government bond yields are tumbling across the advanced economies while central banks are cutting interest rates (Australia) or signalling openness to more monetary policy stimulus (the United States and euro zone).