Eurozone PMI Manufacturing dropped from 52.1 to 49.6 in July, below expectation of 51.0. That’s the lowest level in 25 months. PMI Services dropped from 53.0 to 50.6, below expectation of 52.0. That’s the lowest level in 15 months. PMI Composite Output dropped from 52.0 to 49.4, a 17-month low.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: “The eurozone economy looks set to contract in the third quarter as business activity slipped into decline in July and forward-looking indicators hint at worse to come in the months ahead…
“Excluding pandemic lockdown months, July’s contraction is the first signalled by the PMI since June 2013, indicative of the economy contracting at a 0.1% quarterly rate. Although only modest at present, a steep loss of new orders, falling backlogs of work and gloomier business expectations all point to the rate of decline gathering further momentum as the summer progresses…
“With the ECB raising interest rates at a time when the demand environment is one that would normally see policy being loosened, higher borrowing costs will inevitably add to recession risks.”
