Contraction in the manufacturing sector and weakening in services left their mark on private sector activity in July, the PMI Composite Index shows. In this scenario, Spain breaks through as the only large economy in the euro to expand at the beginning of the first quarter and exceeds the threshold of stagnation. The indicator stood at 48.6 points, compared to 49.9 the previous month, which is its worst reading in 8 months, after the services PMI fell to 50.9 from 52 points, at a 6-month low, and the manufacturing PMI It marked a 38-month low in July, with 42.7 points from the 43.4 in June.
Among the economies surveyed, only Spain (51.7) were above the stagnation threshold, in which Ireland (50) was located, while Italy (48.9), Germany (48.5) and France 46.6, registered contractions of the private activity. According to the PMI survey, the eurozone economy began the third quarter with the fastest contraction in total activity since November last year as a result of a deepening slowdown in the manufacturing sector and a near-total stagnation of activity in the services sector.
In addition, the authors warned that there was notable weakness in demand in July, as new orders fell again and did so at the fastest pace in nine months, including a significant last of export performance, as Demand from foreign customers fell at the steepest pace since the start of the Covid-19 pandemic. As a result, backlogs fell for the fourth consecutive month, and did so at a faster pace, while job growth slowed and business confidence weakened.
Likewise, in the month of July there was also a new attenuation of price pressures, although this decrease continued to be strongly driven by the manufacturing sector, since service companies registered still high increases both in their costs and in their prices. precious collected. “The second half of the year has had a bad start for the euro zone economy,” summed up Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, for whom “divination skills are not required to see that employment growth will halt in the coming months given the gloomier outlook for the economy.”
