Eurozone Growth Sluggish Despite Slight Uptick in Business Activity
Business activity in the euro zone saw modest growth in July, with the composite PMI increasing slightly but remaining below the long-term average. Services saw better performance, especially in Spain and Italy, but France's economy contracted. Cost pressures are easing, raising expectations of a future ECB rate cut.
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In July, the euro zone experienced a modest uptick in business activity, despite ongoing sluggish demand, according to the latest survey. The HCOB Eurozone Composite Purchasing Managers' Index climbed slightly to 50.9 from 50.6 in June, remaining below the expected 51.0.
The services sector displayed a stronger performance with a PMI of 51.0, helped by significant growth in Italy and Spain. However, the export sales continued to contract, affecting the overall growth in the region, while Germany showed only modest progress.
France saw its economy contract for the 11th straight month. Firms added jobs at the fastest rate in a year despite weak demand, and cost pressures fell. Expectations are rising for a European Central Bank interest rate cut as inflation eases in the services sector.
(With inputs from agencies.)
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