Eurozone business growth slows in June on inflation, PMI shows

Eurozone business growth has slowed significantly this month — and far more than expected — as consumers worried about rising bills chose to stay home and delay shopping to save money, a survey showed on Thursday. (23).

The S&P Global Composite Purchasing Managers Index (PMI), seen as a good indicator of overall economic health, dropped to 51.9 in June from 54.8 in May, far below the forecast 54.0. in a Reuters poll and its lowest level since February 2021.

“Eurozone economic growth is showing signs of faltering as the momentum of pent-up demand from the pandemic is already fading, having been offset by the cost of living shock and falling consumer and business confidence,” Chris said. Williamson, chief business economist at S&P Global.

The composite new business index fell from 53.3 to 50.0, a 16-month low and at the mark that separates growth from contraction.

The Services PMI dipped to 52.8 from 56.1, below expectations of 55.5 and the weakest reading since April 2021.

Service providers faced rising input costs at a near-record rate, forcing them to pass on some of this burden to customers.

The input price index rose from 77.4 to 78.3 and was only higher twice in the survey’s 24-year history — in March and April.

Inflation in the bloc hit a record 8.1% last month and could still rise in the coming months, so the European Central Bank is expected to raise its deposit rate above zero for the first time in a decade in September, according to a Reuters poll.

Higher prices meant demand for manufactured goods fell at the fastest pace since May 2020, as the coronavirus pandemic was setting in, and the PMI and industry fell from 54.6 to a nearly two-year low of 52.0. .

The Reuters poll pointed to a modest drop to 53.9.

In Germany, composite PMI drops to 51.3 in June and hits 6-month low

Germany’s composite purchasing managers’ index (PMI), which encompasses the industrial and service sectors, fell from 53.7 in May to 51.3 in June, hitting a six-month low, according to preliminary data released this Thursday by S&P Global.

Despite the drop, a reading above the 50 mark shows that activity in Europe’s largest economy continues to expand this month, but at a more contained pace.

Only the German industrial PMI dropped from 54.8 to 52 in the same period, touching the lowest level in 23 months.

Analysts consulted by The Wall Street Journal predicted decline to 54.

The German Services PMI dropped from 55 in May to 52.4 in June, the lowest level in five months and also below the market consensus of 54.5.

UK manufacturing slumps but UK composite PMI holds at 53.1 in June

The UK’s composite purchasing managers’ index (PMI), which encompasses the industrial and services sectors, stood at 53.1 in June, unchanged from May, according to preliminary data also released on Thursday by the S&P Global in partnership with CIPS.

A reading above 50 indicates that British economic activity continues to expand at the same pace this month.

The June preview surprised analysts consulted by Wall Street Journalwhich predicted a reduction in the composite PMI to 52.9.

Only the UK services PMI was also stable over the same period, bucking the forecast for a decline to 53.

The British industrial PMI fell from 54.6 in May to 53.4 in June, hitting a 23-month low and coming in below the market consensus of a decline to 53.7.