Eurozone private sector activity falls in July: Is the recovery already over?

Eurozone private sector activity dropped in July, hitting a five-month low. The Composite PMI fell to 50.1, signalling near-stagnation and raising concerns about the recovery's momentum.

Private sector activity in the eurozone experienced a sharper-than-expected decline in July, hitting a five-month low and casting doubts on the recovery's momentum for the second half of the year. Preliminary data from the Purchasing Managers' Index (PMI) survey indicated near-stagnation in the eurozone's private sector in July. The Composite PMI dropped from 50.

9 in June to 50.1 in July, the lowest reading since February and below the forecasted 51. This decline is attributed to a slowdown in services growth and worsening contraction in the manufacturing sector.

The Services PMI fell from 52.8 to 51.9, a four-month low, missing expectations of a rise to 53.

The Manufacturing PMI decreased slightly from 45.8 to 45.6, contrary to forecasts of an increase to 46.

1, marking the lowest point for manufacturing since December 2023. The near-stagnation in business activity was reflected in weakening demand. New orders fell for the second consecutive month, and business confidence hit a six-month low, leading firms to pause hiring initiatives started earlier in the year.

Input cost inflation quickened, but weak demand meant companies raised their selling prices more slowly, with the pace of charge inflation at its lowest since last October. Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial .