Eurozone growth slows to six-month low

Eurozone economic growth slowed for a second month running in June, easing to the weakest since December, according to the flash reading of the Markit Eurozone PMI.

As Markit reports, its Flash Eurozone PMI Composite Output Index went down at 52.8, compared 53.5 in May.

Growth remained robust in Germany despite weakening slightly, and France‟s downturn deepened. Elsewhere across the region,however, growth was the strongest since August 2007.

However, despite the slowdown, the average PMI reading for the second quarter as a whole was the highest since the second quarter of 2011, the Markit report also showed.In a sign that activity may reaccelerate, the survey‟s measure of new orders rose to its highest since May 2011, driven by the service sector.

A slowing in growth of manufacturing new orders to the weakest since October pointed to ongoing sluggish production growth in coming months, while service sector companies reported the largest inflow of new business for three years.

The service sector also saw business expectations about the year ahead improve to the second -highest seen over the past
three years.

Although job creation remained only modest, recent months have seen the best spell of job creation in the periphery since early-2008.

Chris Williamson, chief economist at Markit said: “The June PMI rounded off the strongest quarter for three years, but a concern is that a second consecutive monthly fall in the index signals that the eurozone recovery is losing momentum.

“Hopefully the recent stimulus measures from the ECB will help revive growth again, something which may already be evident as the survey saw the largest increase in inflows of new business for three years in June.”



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