LONDON (Reuters) – Euro zone business activity grew slower this month as weak growth in the key services sector failed to offset a deep drop in manufacturing, a survey published on Wednesday showed.
The preliminary HCOB composite purchasing managers’ index compiled by S&P Global fell to 50.1 this month from 50.9 in June but remained just above the 50 mark that separates growth from contraction, reversing expectations of a rise to 51.1 in a Reuters poll.
Outlook for next year weakened again, suggesting business leaders are not expecting an economic recovery anytime soon. The composite future production index fell to a six-month low of 60.0, down from 60.8 in June.
The PMI, which covers the services sector, fell to 51.9 from 52.8 this month, compared with the poll’s forecast of a rise to 53.0.
Services companies faced larger input cost increases this month but raised prices less sharply, with the output price index falling to 53.2 from 53.5.
The move may be welcomed by European Central Bank (ECB) policymakers, who left interest rates on hold last week after cutting them in June but said their September decision was “open.”
The manufacturing PMI fell to 45.6, the lowest in seven months, from 45.8 in June. An index measuring production volume fell to 45.3 from 46.1.
Factories cut jobs at the sharpest pace since December as demand fell at its fastest rate this year. The employment index fell to 46.8 from 47.5.
(Reporting by Jonathan Cable and Christina Fincher Editing by
