Eurozone private sector activity accelerated in July, with Composite PMI rising from 50.6 to 51.0—its highest level in 11 months. Manufacturing PMI improved slightly from 49.5 to 49.8, a 36-month high, edging closer to the 50-mark that separates expansion from contraction. Services PMI climbed to a six-month high of 51.2, from 50.5, pointing to broad-based improvement across sectors.
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said the data suggests the Eurozone economy is “gradually regaining momentum.” The manufacturing recession is “coming to an end,” while services growth has picked up. Their GDP Nowcast model indicates the region is on track for “robust economic growth” in Q3, with Germany likely to show slight expansion while France may post a mild contraction, partly due to its domestic political uncertainty.
For the ECB, the data offers some relief. Services inflation—a key focus for policymakers—continued to ease in July. While goods prices stabilized, a stronger Euro and ongoing US tariffs are expected to put downward pressure on price levels in the months ahead.
