Eurozone recovery losing steam as PMI data shows contraction

Eurozone manufacturing output fell in June, while services growth also weakened with total business activity going into contraction, according to final survey data released on Wednesday.

Manufacturing output slumped to 44.2 from May’s 46.4 and below the flash estimate of 44.6 on weaker demand, which offset falling input costs.

The S&P HCOB headline services index was revised down, to 52.0, from its advance estimate of 52.4, leaving it at a five-month low. The composite PMI Output Index fell to 49.9, compared with May's 52.8), a 6-month low and below the 50 level that marks contraction from expansion.

The composite output prices index fell to 53.8 from 56.4, its lowest since March 2021, in the only spot of brighter news amid the gloomier overall picture.

"The eurozone economy ground to a halt at the end of the second quarter, ending a robust sequence of services-led growth seen since the beginning of the year. While services business activity growth continued, it slowed to a five-month low in June," S&P said.

"Nevertheless, gains in output in the dominant services economy were counteracted by a sharp and accelerated decrease in factory production volumes during June. Weighing on performances was a weakening of demand, with an especially-steep drop in new orders at manufacturers."

Reporting by Frank Prenesti for Sharecast.com