Eurozone Private Sector Growth At 11-Month High

(RTTNews) - The euro area private sector grew at the fastest pace in almost a year in July as the recession in the manufacturing sector is coming to an end, flash survey results from S&P Global revealed Thursday.

The HCOB composite output index posted 51.0 in July, up from 50.6 in the previous month. A score above 50.0 signals expansion. The score was forecast to climb to 50.8.

The score suggested a seventh consecutive monthly increase and signaled the fastest growth since August last year.

Output across the manufacturing and services sectors expanded in July. For the first time in four months, the services category posted the stronger pace of growth, while manufacturing output grew only marginally.

The services Purchasing Managers' Index advanced to 51.2 from 50.5 in June. The score was forecast to edge up to 50.6.

At 49.8, the manufacturing PMI improved to a 36-month high from 49.5 in the previous month. The score was seen at 49.7.

New orders stabilized in July ending a 13-month sequence of contraction. Services new business grew for the first time in six months, while there was a renewed fall in manufacturing new orders.

Employment increased moderately again but business sentiment dipped slightly. On the price front, the survey showed that input cost inflation eased, while companies raised their output prices at the same pace as in June.

"The recession in the manufacturing sector is coming to an end, and growth in the services sector accelerated slightly in July," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

Prices for goods did not fall further in July, but the stronger euro and US tariffs are likely to exert downward rather than upward pressure on inflation in the coming months, added de la Rubia.

The survey showed differing trends across the various areas of the euro area. Germany logged a marginal increase in output for the second straight month. Meanwhile, activity decreased again in France but at the slowest pace in the current 11-month sequence of decline.

France's private sector economy continued to deteriorate with activity contracting for an eleventh consecutive month. The flash composite output index advanced to 49.6 from 49.2 in June. The score was forecast to fall to 49.3.

The services PMI edged up to 49.7, in line with the forecast, and up from 49.6 in the previous month. The factory PMI registered 48.4 compared to 48.1 in June and expectations of 48.5.

Germany's private sector growth softened in July. Higher production levels were recorded in manufacturing, which was partially offset by a stabilization of activity in the service sector.

The composite output index fell to 50.3 in July from 50.4 in the previous month. The score was forecast to climb to 50.7.

At 50.1, the services PMI hit a four-month high from 49.7 in June. The factory PMI advanced to 49.2 from 49.0.