Eurozone Private Sector Recovery Wanes In July
The euro area private sector recovery waned further in July amid deteriorating manufacturing sector performance and softening services activity growth, a survey compiled by S&P Global showed on Wednesday.
The HCOB composite output index dropped unexpectedly to 50.1 in July from 50.9 in June. The score was seen at 51.1. A score above 50.0 indicates expansion.
The manufacturing was the key source of weakness, while an increase in services activity stopped the private sector from falling into contraction.
The services Purchasing Managers’ Index posted 51.9 in July, down from 52.8 a month ago. The score was forecast to climb to 52.9.
At 45.6, the manufacturing PMI slid to a seven-month low from 45.8 seen in June and also below economists’ forecast of 46.1.
New orders dropped for the second straight month in manufacturing, while new business in services grew moderately. However, the growth in services was insufficient to offset the steepest fall in manufacturing orders since December.
New export orders fell for the twenty-ninth consecutive month as firms in the euro area continued to struggle to gain sales from international clients.
Sentiment among companies slid to a six-month low and came in below the series average with confidence waning in both manufacturing and services sectors.
Ending a six-month sequence of job creation, employment was unchanged in July. While service providers raised staffing levels, manufacturing workforce numbers decreased to the largest extent in 2024 so far.
Manufacturers reduced their purchasing activity and lowered inventories of both purchases and finished goods. Meanwhile, suppliers’ delivery times shortened for the sixth consecutive month.
On the price front, the survey showed that input prices grew sharply in July to hit a three-month high. Price pressures were more pronounced in the service sector. That said, manufacturing cost inflation also picked up to the fastest rate in a year-and-a-half.
Meanwhile, output price inflation softened as falling demand limited pricing power. Charges increased at the slowest pace since last October.
“Our conclusion is that while a September rate cut will most probably be exercised, it will be much trickier to follow this path in the months thereafter, unless the downturn morphs into a deep recession,” Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.
Among big-two economies, output in Germany decreased for the first time in four months, while France posted a third consecutive monthly reduction in business activity.
Germany’s private sector slipped into contraction in July due to the deeper decline in manufacturing and slower growth of services activity. The HCOB composite output index dropped unexpectedly to 48.7 from 50.4 in June.
The services PMI registered a four-month low score of 52.0 in July, while it was expected to remain unchanged at 53.1. The manufacturing PMI plunged unexpectedly to 42.6 from 43.5 a month ago. The consensus was 44.0.
France’s private sector output moved closer to stabilization in July as the Olympic Games fueled economic activity. The HCOB composite output index posted 49.5 in July, up from 48.2 in June.
The flash factory PMI eased to 44.4 from 45.3 in June. The score was forecast to rise to 45.8. On the other hand, the services PMI rose to a three-month high of 50.7 from 48.8 in the previous month. The expected reading was 49.7.
RTTNews Economic Calendar helps you stay ahead of the curve and is updated in real-time. Get your Economic Calendar today and make data-driven decisions.
Broker | Website | |
---|---|---|
🥇 | ![]() | Visit Broker |
🥈 | ![]() | Visit Broker |
🥉 | ![]() | Visit Broker |
4 | ![]() | Visit Broker |
5 | ![]() | Visit Broker |
6 | ![]() | Visit Broker |
7 | ![]() | Visit Broker |
![](https://d1nsb2kebuy3pr.cloudfront.net/wp-content/themes/fxmlnew/assets/images/subscribe-icon.png)