Euro area business activity slowed in July, dragged down by a sharp fall in Germany’s manufacturing sector, the preliminary Purchasing Managers’ Index (PMI) showed.
The euro-area Composite PMI, including manufacturing and services sectors, eased growth to 51.5 in July from 52.2 in June. That came below analysts’ anticipations of 52.1.
Germany’s manufacturing PMI led the fall with a contraction of 43.1 this month, worst month in seven years in July, from 45.0 in June.
Accordingly, the Composite PMI reading in Germany slipped to a four-month low of 51.4 from 52.6 in June.
The weakness in Germany’s manufacturing stemmed from “an accelerated drop in export orders–the most marked seen in over a decade … raising the risk of the euro area’s largest member state entering a mild technical recession,” said Phil Smith, principal economist at IHS Markit.
As of 08:26 GMT, the euro plunged to a low of $1.1126, the lowest since May 31, extending its drop for a fourth consecutive session.
Eyes will focus tomorrow on the European Central Bank’s policy meeting,
as some analysts predict an action to bolster eurozone growth and inflation.