Eurozone June business activity growth slips to weakest level since January 2015

Data released earlier today showed Euro area business activity growth slowed slightly in June. Flash Eurozone PMI Composite Output Index fell from 53.1 in May to 52.8 in June. PMI was at its weakest level since January of last year amid signs of political and economic uncertainty dampening business activity.

Moderate growth was recorded in both the manufacturing and service sectors. Pace of expansion in services sector was at its slowest in 18-months and likely offset the acceleration in the rate of goods production. Overall growth of new business across both sectors consequently inched only slightly higher, remaining one of the weakest seen over the past year-and-a-half.

Reduced optimism in France and, on average, outside the ‘big two’, contrasted with a brighter outlook among German firms. The rest of the region enjoyed only slightly slower growth than that recorded in Germany, with the pace of expansion picking up from May’s 17-month low.

“The second quarter is therefore likely to see economic growth slacken from the solid 0.6% expansion seen in the opening quarter of the year to around 0.3%," said Chris Williamson, Chief Economist at Markit.