The euro zone's private sector expanded at the end of the second quarter, but growth momentum was lost due to softening demand and sluggish sales, final results of the HCOB Purchasing Managers' Survey compiled by S&P Global showed on Wednesday.
The composite production index fell to 50.9 in June from 52.2 in the previous month. The score was slightly higher than the preliminary reading of 50.8.
The index has remained unchanged above 50.0 for four consecutive months, with the latest score signaling a slowdown in economic expansion.
The services purchasing managers' index fell to a three-month low of 52.8 in June from 53.2 in May. The preliminary reading was 52.6.
Silas de la Rubia, chief economist at Hamburg Merchant Bank, said the services sector was being bolstered by high tourist numbers. The European soccer championships will support tourism in the coming months, he said.
At an aggregate level, demand conditions restrained growth, with total new work volumes falling for the first time since February, the survey showed. work We have also won contracts from clients all over the world.
Backlogs fell for the 15th consecutive month in June, and the overall rate of decline in backlogs was the fastest since February.
Employment across the euro area continued to grow through June, but the pace of growth slowed from May as labor force expansion was confined to the services sector.
Expectations for business activity next year remained positive, but levels of optimism fell to their lowest in four months.
On the price side, input price inflation fell to its lowest level in five months, while output prices grew at the slowest rate since October last year.
Among the four largest economies, Spain grew fastest with output surging, while Germany saw a modest recovery and Italian growth slowed to its lowest in four months. France's private sector weakened for a second straight month.
German private sector growth slowed from its 12-month growth rate in May. The HCOB headline production index fell to 50.4 in June from 52.4 in the previous month, below the flash reading of 50.6.
The Services PMI fell to 53.1 in June from 54.2 in May, marking the first decline in the index since January. The initial score for June was 53.5.
France's private sector contracted slightly in June. The final composite production index was 48.8, down from 48.9 in May but up from an initial score of 48.2. The services PMI fell to 49.6 in June from 49.3 a month earlier. The flash reading was 48.8.
Italy's private sector growth slowed to a four-month low in June as the decline in manufacturing accelerated and growth in services weakened, the survey showed. The headline output index fell to 51.3 from 52.3 the previous month.
The services PMI rose to 53.7 in June from 54.2 in May, recording the sixth consecutive month of increased business activity.
Spain's private economy continued to expand in June, supported by strong demand from both domestic and foreign customers. The composite production index was 55.8, down from 56.6 in May. The services activity index fell to 56.8 from a 13-month high of 56.9 in May.
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Renju Jaya
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