In June, Eurozone PMI Services index was finalized at 52.8, slightly down from May’s 53.2. PMI Composite also dropped, finalizing at 50.9 compared to the previous month’s 52.2.
The countries ranked by Composite PMI Output Index are as follows: Spain at 55.8 (a 2-month low), Italy at 51.3 (a 4-month low), Germany at 50.4 (a 3-month low), Ireland at 50.1 (an 8-month low), and France at 48.8 (a 3-month low).
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted that Eurozone’s growth is driven entirely by the service sector. While manufacturing activity “weakened considerably”, the services sector continued to grow “nearly as robust as” the month before. De la Rubia emphasized that service providers will be crucial in maintaining overall economic growth throughout the year.
The recovery in service sector is broad-based across the top four Eurozone economies. Spain led with significant growth, followed by solid performances in Germany and Italy. However, France’s service providers were unable to increase their activity.
ECB, which cut interest rates in June, found some validation in the price indices. Input prices and prices charged to clients rose at the slowest pace in three years. Nonetheless, ECB would remain cautious, as these price increases are still above pre-pandemic levels and remain high considering the economy’s fragile state.
