The euro area private sector expanded at a faster than initially estimated pace in June reflecting a pick-up in economic growth in the currency bloc, survey data from IHS Markit showed Wednesday.
The final composite output index rose to 52.2 in June from 51.8 in May. The initial score was 52.1.
The reading signaled the fastest growth in the private sector since November 2018. A score above 50 suggests expansion.
Nonetheless, the headline index masked notable divergences in sector performance in June. The services economy posted a robust growth which was the best in eight months, while the downturn in manufacturing continued.
The final services Purchasing Managers’ Index climbed to 53.6 in June from 52.9 in May and stayed above the estimate of 53.4. The score signaled the strongest expansion since October 2018.
The survey is indicative of GDP merely rising by just over 0.2 percent in the second quarter, and a deterioration of business expectations for the year ahead to one of the lowest seen for over four years suggests the business mood remains somber, Chris Williamson, chief business economist at IHS Markit said.
There is nothing in the latest data releases to deflect the European Central Bank from its current path towards more policy easing, Andrew Kenningham, an economist at Capital Economics, said.
At the country level, Germany posted unchanged growth in June, while France enjoyed its best performance for seven months as both manufacturing and services showed solid output gains.
Germany’s service sector logged the fastest growth in business activity in nine months. The final services PMI came in at 55.8, up from 55.4 in May and the flash score of 55.6.
The private sector continued to log moderate expansion in June. The final composite PMI held steady at 52.6 and in line with flash estimate.
France’s private sector expanded at the fastest pace since November 2018. The composite PMI improved to 52.7 in June from 51.2 in May. The initial reading for June was 52.9.
Similarly, the services PMI climbed to a 7-month high of 52.9 in June from 51.5 in May. The score was below the flash estimate of 53.1.
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