Eurozone business growth edged higher in July – PMI

The economic data released on Tuesday showed that business activity in the euro zone grew at a slightly faster pace in July compared to previous month but remained sluggish due to weak demand.

The Eurozone Composite Purchasing Managers’ Index edged up to 50.9 in July from 50.6 in June, just under consensus / previous month figure at 51.0.

Services PMI climbed to 51.0 in July from 50.5 previous month but missed consensus at 51.2, with both readings remaining above 50.0 threshold, which separates growth from contraction.

July’s numbers were close to a four-month high but were still below the survey’s long-term average of 52.4, reflecting persistent weakness in the euro- bloc.

Economists remain optimistic and expect further improvement in the services sector this summer, particularly in Spain and Italy, where business activity rose more in July compared to the previous month, while results from Germany showed that recovery is picking up after several challenging months.

Spain continues to lead with the strongest expansion, followed by Italy, while Germany, the bloc’s largest economy, recorded only modest growth last month.

France was the only one from large euro zone economies to contract, with its July PMI falling from the previous month, and remaining in a downtrend for the eleventh consecutive month.

However, the euro zone companies continued to add jobs for a fifth straight month in July, although with still modest pace of job creation, but with encouraging signals that July’s rise was the fastest in over one year.