Euro zone business growth virtually stalled this month as the downturn in manufacturing deepened while activity in the bloc’s dominant services industry barely expanded, a survey showed on Friday.
HCOB’s flash Composite Purchasing Managers’ Index (PMI) for the bloc, compiled by S&P Global and seen as a good gauge of overall economic health, sank to a five-month low of 50.3 in June from May’s 52.8.
That was barely above the 50 mark separating growth from contraction and below all forecasts in a Reuters poll which had predicted a more modest decline to 52.5.
“After euro zone GDP fell for the second time in a row in the first quarter, the probability has increased somewhat that the GDP change will again carry a negative sign in the current quarter,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
Overall demand declined for the first time since January. The composite new business index dropped to 48.3 from 50.3.