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Financial News: Eurozone Private Sector Growth Cools To 3-Month Low

Eurozone Private Sector Growth Cools To 3-Month Low

07/03/2024 - 08:10:00 (RTTNews)

(RTTNews) - Euro area private sector expanded at the end of the second quarter but the growth lost momentum due to the softening demand and weaker sales, final results of the HCOB Purchasing Managers' survey, compiled by S&P Global, showed on Wednesday.

The composite output index registered 50.9 in June, down from 52.2 in the previous month. The score was slightly above the flash score of 50.8.

The index has remained above the 50.0 no-change mark for the fourth straight month and the latest score indicated a slowdown in the expansion.

The services Purchasing Managers' Index dropped to a three-month low of 52.8 in June from 53.2 in May. The flash reading was 52.6.

Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said the service sector is supported by the high number of tourists. The European Football Championship is set to support tourism over the coming few months, said de la Rubia. At the composite level, demand conditions curbed the growth as total new workloads shrank for the first time since February, the survey showed. New business from global clients also contracted.

Outstanding business volumes decreased for a fifteenth straight month in June. Moreover, the overall rate of backlog depletion was the strongest since February. Employment across the euro area stretched out its growth sequence into June. However, the pace of increase slowed from May as workforce expansion was limited to the service sector. Although expectations for business activity in the coming year remained positive, the level of optimism slipped to a four-month low. On the price front, input price inflation eased to a five-month low and output charges grew at the weakest rate since last October.

Among the big-four economies, Spain was the fastest-growing economy, with a sharp rise in output. Meanwhile, muted upturns were registered in Germany, while Italy's growth eased to a four-month low. France's private sector weakened for a second straight month.

Germany's private sector growth moderated from a 12-month in May. The HCOB composite output index fell to 50.4 in June from 52.4 in the prior month and also below the flash 50.6.

The services PMI posted 53.1 in June compared to May's 54.2, marking the first drop in the index since January. The initial score for June was 53.5.

France's private sector contracted slightly in June. The final composite output index came in at 48.8, down from 48.9 in May but above the initial score of 48.2. The services PMI dropped to 49.6 in June from 49.3 a month ago. The flash reading was 48.8.

The survey showed that Italy's private sector growth slowed to a four month low in June, owing to a faster manufacturing decline and a softer increase in services activity. The composite output index slid to 51.3 from 52.3 in the previous month.

The services PMI posted 53.7 in June compared to 54.2 in May and marked a sixth consecutive month that an increase in business activity has been recorded.

Spain's private economy continued to expand in June, underpinned by positive demand from domestic and external clients. The composite output index came in at 55.8, which was below 56.6 in May. The services business activity index fell to 56.8 from May's 13-month peak of 56.9.

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