The Eurozone PMI services index was finalized at 52.8 for June, down slightly from 53.2 in May. The PMI composite index also fell to 50.9 from 52.2 in the previous month.
The rankings of countries based on the composite PMI production index are: Spain 55.8 (lowest in two months), Italy 51.3 (lowest in four months), Germany 50.4 (lowest in three months), Ireland 50.1 (lowest in eight months) and France 48.8 (lowest in three months).
Cyrus de la Rubia, chief economist at the Hamburg Commercial Bank, noted that euro zone growth was entirely driven by the services sector. Manufacturing activity “weakened significantly,” but the services sector continued to grow “more or less at the same rate” as in the previous month. De la Rubia stressed that service providers will be crucial in maintaining overall economic growth throughout the year.
The recovery in the services sector was broad-based across the top four euro area countries, with Spain leading the way with strong growth, followed by Germany and Italy with solid performances, but French services providers failed to increase activity.
The ECB, which cut interest rates in June, found some justification in the price index: input prices and prices charged to customers rose at the slowest pace in three years. That said, these price increases are still above pre-pandemic levels and remain high given the fragile state of the economy, so the ECB is likely to remain cautious.
Read the full Eurozone Services PMI final release here.
