Eurozone business growth stalls in July

Growth in eurozone business activity stalled this month as a tepid expansion in the bloc’s dominant services industry failed to offset a deeper downturn among manufacturers, a survey showed on Wednesday.

HCOB’s preliminary composite Purchasing Managers’ Index, compiled by S&P Global, dropped to 50.1 this month from June’s 50.9, barely above the 50 mark that separates growth from contraction and defying expectations in a Reuters poll for an uptick to 51.1.

Expectations about the coming year waned again, suggesting business managers do not expect an imminent turnaround. The composite future output index registered a six-month low of 60.0 compared to June’s 60.8.

A PMI covering the services sector fell to 51.9 this month from 52.8 versus a poll prediction for an increase to 53.0.

Services firms faced a steeper increase in input costs this month but raised their prices charged at a shallower rate. The output prices index eased to 53.2 from 53.5.

That could be welcomed by policymakers at the European Central Bank who left interest rates on hold last week, having lowered them in June, but said September’s decision was “wide open”.

The manufacturing PMI dipped to a seven-month low of 45.6 from June’s 45.8. An index measuring output dropped to 45.3 from 46.1.

With demand falling at its fastest pace this year, factories reduced headcount at the sharpest rate since December. The employment index fell to 46.8 from 47.5.