According to the flash report from HCOB, business activity in the private sector of the eurozone unexpectedly declined in June, reaching a 3-month low. Business confidence dipped to the lowest since February, while rates of input cost and output price inflation eased to six- and eight-month lows respectively.
The Eurozone Composite PMI Output Index fell in June to 50.8 points from 52.2 points in May. An index value above 50 points indicates an expansion of activity in the sector. Economists had expected the index to rise to 52.5 points. The services PMI fell to 52.6 from 53.2 in May, while the manufacturing PMI fell to 45.6 points from 47.3 points. Economists had expected the services PMI to rise to 53.5 points and the manufacturing PMI to reach 47.9 points.
HCOB said that new orders in the private sector declined in May for the first time in four months. The pace of decline was only slight, however. Meanwhile, new export orders recorded the sharpest drop since February. Private sector employment rose again in May (for the sixth month in a row), but the pace of growth was the weakest since March. As a result, backlogs of work continued to be depleted solidly, with the latest reduction the most marked since February. The rate of input cost inflation eased for the second month running in June and was the slowest in the year-to-date. Input prices continued to rise sharply, however, with the latest increase still slightly stronger than the pre-pandemic average. As for the outlook for business activity, after reaching a 27-month high in May, business confidence declined in June, and reached a 4-month low, but still broadly in line with the series average.