Eurozone Private Sector Expands Most In 8 Months

(RTTNews) - The euro area private sector expanded the most in eight months in July as output and new business rose for the first time since the start of the year, final purchasing managers' survey data from S&P Global showed Wednesday.

The final composite output index posted 52.0 in July, up from 50.0 in the previous month. The flash reading was 51.9.

July's overall expansion was broad-based, with services output growth combining with a sustained uplift in manufacturing production.

The final services Purchasing Managers' Index came in at 51.7, up from 49.4 in June and the flash score of 51.6.

Demand for euro area goods and services grew for the first time since February. Businesses continued to made backlog clearances, while employment stabilized following a six-month run of net job losses. Business optimism improved for a third month in a row.

The survey showed a further cooling of price pressures as rates of both input cost and output charge inflation dropped.

S&P Global Market Intelligence Chris Williamson said there are renewed downside risks to growth and upside risks to already-elevated inflation.

"The latter puts policymakers in more hawkish decision-making stance, though the marked drop in the PMI price gauges potentially provides a window for further rate hikes to be delayed until the outlook for inflation becomes clearer."

Among big-four economies, Germany posted its first rise in private sector output since March, while both Italy and Spain saw stronger rates of growth. Meanwhile, France's continued contraction made it an outlier.

Led by a marked rise in manufacturing output, Germany's composite output index climbed to 51.3 in July from 49.5 in June. The initial reading was 51.2. The services PMI advanced more- than-estimated to 49.8 from 48.6 in June. The flash score was 49.6.

France's private sector contracted in July, albeit at a softer pace than in June. The final composite output index registered 49.4 compared to 47.2 in June and the flash reading of 49.6. The services PMI advanced to 49.6 from 46.8 in June and remained slightly above the initial reading of 49.8.

Italy's private sector expanded at the fastest rate in eight months in July. The composite output index hit 52.5, up from 50.8 in June. The services PMI also posted 52.5 compared to 50.2 in the previous month. Spain's private sector maintained its upward trend in July. The composite PMI climbed to a 19-month high of 56.5 from 53.3 in June. The services PMI posted 58.3, up from 54.2 in June and well above economists' forecast of 54.9.