Eurozone Private Sector Expands For Sixth Straight Month

(RTTNews) - The euro area private sector expanded for the sixth straight month in June as sustained increases in manufacturing output coincided with a stabilization of services activity, flash purchasing managers' survey results from S&P Global showed on Monday.

The flash HCOB composite output index remained unchanged at 50.2 in June. The index posted above the 50.0 no change mark for the sixth consecutive month but the pace of growth was marginal.

Overall growth was again centered on the manufacturing sector, where production grew for the fourth month in a row. Meanwhile, services business activity stagnated in June.

The manufacturing Purchasing Managers' Index registered 49.4, unchanged from May. The score was forecast to rise to 49.6. The services PMI rose to the threshold 50.0 mark, as expected, from 49.7 a month ago.

The latest reduction in new business was the slowest in the current 13-month sequence of decline. New export orders decreased moderately, but to the least marked extent since April 2022. Employment was up marginally again in June, with the pace of job creation unchanged from May.

Regarding prices, the survey showed that input cost inflation slowed for the fourth straight month and reached the weakest since last November. Selling prices grew at a slightly faster pace than in May.

There was an improvement in business confidence with sentiment up to the highest since January.

"The eurozone economy is struggling to gain momentum," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

Euro area's momentum evident in the official growth figure of 0.6 percent for the first quarter is unlikely to have carried over into the second quarter, said de la Rubia.

"However, there is no reason to be resigned, as the outlook has brightened according to the survey and companies are keeping employment roughly constant," the economist added.

Data showed that Germany logged a renewed expansion in output, after activity decreased moderately in May. On the other hand, France posted a further reduction in output, extending the current sequence of decline to ten months.

Germany's private sector returned to growth in June, led by the manufacturing sector. The HCOB composite output index stood at 50.4 in June, rebounding from a five-month low of 48.5 in May.

Growth in manufacturing output was partly offset by a slower reduction in services activity. At 49.0, the factory PMI rose to a 34-month high from 48.3 in May. The reading was also above expectations of 48.9.

France's private sector output declined further in June. The HCOB flash composite output index declined to 48.5 in June from 49.3 in the previous month. Although the fall was moderate, it took the current sequence of reduction to ten months. The service economy was the main source of private sector weakness in the last two months. In June, the manufacturing industry slipped back into contraction by recording its fastest drop since February.

The services PMI registered 48.7 in June, down from 48.9 in the prior month. The score was forecast to rise to 49.2.

The manufacturing PMI slid unexpectedly to a four-month low of 47.8 from 49.8 a month ago. The score was seen unchanged at 49.8.