Eurozone June composite PMI at 5-month low, manufacturing at 74-month high

According to the preliminary purchasing managers’ index (PMI) released by Markit Economics, the Eurozone PMI Composite Output Index hit 5-month low due to a significant slowdown in the service sector.

The composite PMI fell to 55.7 in June from 56.8 recorded in May, which was the highest of six years. The quarterly performance of the region, however, was still the best of six years on the back of a serious rise in manufacturing output to a reading of 58.5 in June, a 74-month high, from 58.3 in May.

The data also showed that job creation posted a steep rise in June which was driven by the capacity expansion of the companies in order to meet the rising demand in line with the increase in new orders, partially owing to strong export sales. Overall exports also posted the largest increase of six years, which was attributed to the increasing demand in main sales markets and the depreciation in the value of the euro.

According to the data, the biggest economies of the region, France and Germany posted slower growths in June at five and four-month low, respectively, basically due to a slowdown in expansion in the service section. A similar slowdown was also recorded in the other countries in the region although business activity and employment were still at the highest of ten years.