The Eurozone economy failed to gain momentum in June. Markit's final composite Purchasing Managers' Index for the euro zone was 53.1 in June, beating a flash estimate of 52.8, but unchanged from May. The average reading for the headline index for the second quarter was slightly below that for Q1 (53.1 versus 53.2) and at its lowest level since the final quarter of 2014.
It is worth mentioning that the majority of the survey was completed before Britain voted to leave the EU on June 23, implying that the after-shocks of the referendum have yet to be reflected in the data.
Faster manufacturing growth was countered by a slowdown in the service sector, leaving the overall pace of expansion of business activity unchanged since May. The final Eurozone Services Business Activity Index posted 52.8 in June, down from 53.3 in May but above the earlier flash estimate of 52.4. PMI data indicated solid expansions in Germany, Italy, Spain and Ireland during June, while France remained well behind.
There was brighter news on employment, which rose at the fastest rate for just over five years. Steeper increases were registered at manufacturers and service providers alike. Business confidence continued to slide, however, with the overall degree of optimism at a seven-month low in June.
“The survey is signaling GDP (gross domestic product) growth of just 0.3 percent, similar to the sluggish trend recorded over the past year,” said Chris Williamson, chief economist at survey compiler Markit.
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