The final data published by HCOB showed that activity in the eurozone private sector declined again in July, driven by a further reduction in demand for euro area goods and services, particularly from non-domestic sources. Meanwhile, business confidence slipped to a six-month low.
The Eurozone Composite PMI Output Index, which assesses the change in activity in the manufacturing sector and the service sector, fell in July to 50.2 points from 50.9 points in June. Economists had expected a decline to 50.1 points. Despite the drop, the index remained above the 50 point mark, indicating an expansion in activity in the sector, but recorded the weakest expansion since March. Meanwhile, services PMI reached 51.9 (4-month low) compared to 52.8 in June and forecasts at 51.9.
The data also showed that new orders in the private sector declined again in July, accelerating compared to June. But weaker sales performances were exclusive to manufacturers, although growth in new workloads slowed at services firms. Meanwhile, new export orders recorded the sharpest decline in 5 months. The rate of backlog depletion was solid and the quickest since February. As for the outlook, private sector companies expect the level of activity to be higher in the next 12 months, although the level of confidence in these forecasts has decreased. Overall, businesses have been the least optimistic since January. The data also showed that eurozone private sector employment broadly stagnated in July. Meanwhile, input cost inflation accelerated in July to 14-month high, and output charges rose at the slowest rate since last October.