Eurozone July business activity fell faster than estimates - PMI

Eurozone business activity stagnated more than initial estimates last month as the services sector also slowed along with the already-troubled manufacturing industry, a survey showed on Thursday.

The S&P final composite purchasing managers’ index (PMI) fell to an eight-month low of 48.6 in July from June’s 49.9 and fash estimate of 48.9. A mark of 50 separates growth from contraction.

“The slump in activity is driven by manufacturing, but services activity growth has cooled off too, scaling back the support to the economy as a whole,” S&P Global said.

Manufacturing PMI results published on Tuesday showed factory activity across the single-currency bloc contracted in July at the fastest pace since the Covid-19 pandemic, while Wednesday’s services PMI also showed slowing growth.

“July’s contraction was brought about by a deepening downturn in the manufacturing sector and a near-stalling of services output. There was also notable weakness with respect to demand as total new orders fell again and to the quickest extent in nine months,” S&P said.

“Export performance was a considerable drag as demand from foreign clients fell at the steepest rate since the start of the Covid-19 pandemic over three years ago. Falling new business led to a greater reliance on backlogs of work to help sustain activity levels where possible.”

Reporting by Frank Prenesti for Sharecast.com