Eurozone Private Sector Continues To Expand

(RTTNews) - Euro area private sector remained in the expansionary territory in July but the rate of growth remained sluggish as stagnant demand pulled back production, final survey results of the purchasing managers' survey by S&P Global showed on Tuesday.

The HCOB composite output index rose to 50.9 in July from 50.6 in June. The flash reading was 51.0. A score above 50.0 indicates expansion.

The S&P Global survey showed that overall expansion was driven by services as goods production rose at a slightly slower pace than in June.

The HCOB services Purchasing Managers' Index ticked up to 51.0 in July from 50.5 in June. The score signaled the fastest growth since March but the reading was below the initial estimate of 51.2.

New orders dropped again in July as export sales remained a drag, stretching the decline to 41 months. Despite weaker demand and capacity pressures, companies lifted their workforces for a fifth straight month.

Business sentiment declined for the first time since April as growth expectations fell further, the PMI survey found.

Regarding prices, the survey showed a moderate easing in input cost inflation in July. At the same time, output charge inflation accelerated to a three-month high.

Focusing on the four largest euro area countries, PMI data showed growth in most cases. Expansions picked up in Spain and Italy.

Germany also gained momentum, while activity in France decreased for an eleventh straight month.

The German private sector expanded for the second straight month and also registered its fastest growth since March. Germany's final composite output index posted 50.6, up from 50.4 in June and the initial score of 50.3. Similarly, the services PMI advanced to 50.6 from 49.7 in the previous month. The flash reading was 50.1.

France's private sector registered a bigger fall in activity in July as both manufacturing and services posted similar rates of contraction in output.

The final composite output index slid to 48.6 from 49.2 in June. The score was initially estimated at 49.6. The services PMI posted 48.5 compared to 49.6 in the prior month and the flash estimate of 49.7.

Italy's private sector regained growth momentum in July. The expansion remained centered on the services economy amid a sustained drop in manufacturing output.

The composite output index improved to 51.5 from 51.1 a month ago. Likewise, the services PMI registered 52.3, up from 52.1 in June and economists' forecast of 52.5.

Spain's private sector growth picked up to a five-month high in July with the growth rising to its highest level since February. The composite output index registered 54.7, up from 52.1 in June.

The services PMI rose more-than-expected to 55.1 in July from 51.9 a month ago. The reading was seen at 52.6.