Euro Area: Services PMI falls in July
The HCOB Eurozone Services Purchasing Managers’ Index (PMI) fell to 51.9 in July from 52.8 in June. As a result, the index remained above the 50.0 no-change threshold but signaled a softer improvement in services-sector business activity compared to the previous month.
The fall was driven by a slower rise in new business, with demand for Eurozone services showing only a marginal improvement—the softest in the current five-month upturn. Sales growth was confined to domestic markets, as new export business contracted at the fastest pace in five months. Despite this, activity growth outpaced the increase in new business, aided by firms’ efforts to reduce backlogs of work, which fell for the third successive month. Meanwhile, employment growth continued, albeit at the weakest rate since the beginning of the year.
In terms of prices, input cost inflation ticked up, while output charges in the services sector increased at the slowest pace since May 2021. Lastly, business confidence hit a six-month low in July.