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Eurozone business sector recovers, yet remains in contraction

Eurozone business sector recovers, yet remains in contraction

The eurozone final composite purchasing managers’ index including both services and manufacturing, which is a measure of business activity in the euro area, showed that recovery is continuing in June, compared to the previous reading, but contraction remains the dominant feature of the economic performance.

Services PMI increased in June to 48.3 after a previous reading of 47.3, moving in line with expectations, while the composite index showed a recovery to 48.5 from a previous of 47.5.

Weak global and European demand had limited the recovery of the services sector in Germany, as it is currently experiencing a slow recovery since the country lifted the restrictions it imposed to slowdown the spread of the Corona virus.

Despite the recovery in business activity in Germany during the month of June, the activity is still quite low due in part to the continued weak demand.

In France, the services sector index returned to growth after the easing of shutdown measures, which boosted business activity in general in France. The index recorded 50.7 last month after a reading of 31.1 in May.

Thus, the index rose above the 50-point level, which is the boundary between growth and contraction.

The euro fell for a second day in a row against the US dollar, with the pair recording the lowest level today at 1.1218 after opening the session at 1.1231. The markets are witnessing a narrow-range in trading due to the Independence Day holiday in the United States.

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