(MENAFN) Business growth across the euro area slowed significantly in June, according to the S&P Global Purchasing Managers' Index (PMI), as a strong services sector contrasted sharply with a weakening manufacturing sector. The index fell to 50.9 in June from a 12-month high of 52.2 in May, slightly above the earlier forecast of 50.8 points. Despite the decline, the index remained above the crucial 50-point threshold that separates expansion from contraction for the fourth consecutive month.
While the services sector is still expanding, the PMI fell to 52.8 from 53.2 in May, but was above the initial forecast of 52.6 points. Meanwhile, manufacturing posted its biggest drop in six months, with the PMI falling to 46 in June from 49.3 in the previous month. This was the lowest level of manufacturing activity since March.
The euro zone purchasing managers' index compiled by Commerzbank in Hamburg and published by S&P Global highlighted the contrasting fortunes of the sectors. The composite PMI fell to 50.8 in June from 52.2 in May, pointing to a general slowdown in economic activity. The index suggests GDP growth is likely to continue in the second quarter, despite manufacturing struggles, according to a Standard & Poor's analysis.
The data reflect the resilience of the services sector amid a contraction in manufacturing, highlighting ongoing challenges for the euro area economy. The divergence highlights the complex situation policymakers face in designing economic policies to sustain growth amid sectoral disparities.
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