Euro zone economic growth slowed in June, according to a closely watched survey released on Wednesday, as a recovery in the services sector failed to offset a decline in manufacturing.
Final H.C.O.B. The euro area services PMI business activity index was revised up to 52.8 from the preliminary figure of 52.6.
The figure was down from 53.2 in May and the lowest in three months, but it meant the services sector continued to grow.
But when combined with earlier released data on struggling manufacturing, the overall index fell sharply.
The HCOB euro area composite PMI production index was 50.9, still above the neutral level of 50.0 but down from 52.2 in May.
The HCOB Eurozone manufacturing PMI production index, released earlier this week, fell from 49.3 to 46.1.
A balance above 50 indicates growth, while a balance below 50 indicates contraction.
Respondents said demand weakened in June for the first time since February, with sales particularly weak in overseas markets.
However, input costs and output prices fell to five-month and eight-month lows respectively, but remain above pre-pandemic trends.
Looking at individual countries, Spain's composite PMI production index was 55.8 and Italy's was 51.3, but France's was 48.8.
In Germany, the European Union's largest economy and manufacturing-dependent country, the overall index came in at 50.4, just below the initial reading of 50.6.
Silas de la Rubia, Chief Economist Hamburg Commercial Bank“Euro area growth is entirely driven by the services sector,” he said.
“In our view, the sector is supported by rising tourist numbers. According to private statistics, tourist arrivals to Europe grew by 7.2% in the first quarter and have now exceeded pre-COVID levels. In Germany, the European football championships are giving tourism an additional boost.”
“Tourism will remain an important growth driver for the euro area in the coming months.”
