Eurozone PMIs fall as declining business activity erodes confidence

LONDON (ICIS)–The eurozone composite and services sector Purchasing Manager Indexes (PMIs) both fell in July as weaker business activity expansion pushed confidence to a six-month low.

The S&P Global composite PMI hit a five-month low while the services activity index was at a four-month low, both having declined from June but remaining in expansionary territory above 50.

The loss of momentum in July resulted from business activity rising only at a fractional pace, the intelligence firm said in its Hamburg Commercial Bank (HCOB) PMI statement.

Services, the main economic driver, faced a stronger contraction in factory output, affecting private sector expansion.

Demand fell and business confidence hit a six-month low as employment levels stagnated. In response, companies cleared work backlogs in July at the fastest rate since February.

The survey also showed an increase in input cost inflation for both manufacturers and service providers.

“The slump in the service sector is happening across the eurozone. Growth has slowed down in Germany, Italy and Spain. France is the only exception, where the PMI has gone up,” said Cyrus de la Rubia, HCOB chief economist.