BRUSSELS (dpa-AFX) - The euro area private sector contracted at a slower pace in June as services activity posted a slower fall while manufacturing output continued to grow moderately, flash survey results from S&P Global showed Tuesday.
The flash composite output index registered 49.5 in June, up from 48.5 in the previous month. The score was above economists' forecast of 49.1.
The indicator remained below the neutral mark of 50, signaling a third consecutive fall in business activity. Nonetheless, the latest fall was the weakest in the current sequence of contraction.
There was a weaker decline in services activity, while manufacturing production increased further. The services Purchasing Managers' Index advanced more-than-expected to 48.9 in June from 47.7 in the previous month.
Although the manufacturing PMI dropped to 51.3 from 51.6, the above-50 reading signaled expansion. Economists had forecast the index to remain unchanged at 51.6.
'The eurozone economy is showing enough resilience to just about stay out of recession,' S&P Global Market Intelligence Chief Business Economist Chris Williamson said.
'The flash PMI registered only a slight drop in business activity in June, meaning the survey is indicative of unchanged GDP over the second quarter,' Williamson added.
Most of the survey responses of the June survey were received prior to the signing of the memorandum of understanding for a cessation of hostilities between the U.S. and Iran on June 17.
There was a sustained slump in new orders in the private sector. A renewed increase in manufacturing new orders was insufficient to counteract a further fall in services activity.
Inflationary pressures eased in June. Input cost inflation was the slowest since February. In turn, output price inflation slowed in June, albeit to a lesser extent than was seen for input costs.
Suppliers' delivery times lengthened in June and purchasing activity was broadly unchanged from May. Employment dropped only fractionally and to the smallest extent since February.
Business confidence improved for the second straight month in June, after dropping to a 31-month low in April. Confidence improved in both the manufacturing and service sectors.
The two largest eurozone economies registered decline in output. However, the rate of contraction eased in France, while Germany reported the fastest reduction in a year-and-a-half.
Germany's flash composite output index registered 48.0 in June, down from 48.8 in May. The score was forecast to rise to 49.9. The reading was the lowest recorded since December 2024.
The latest decrease was centered on the service sector, which recorded its worst performance in over three-and-a-half years in June. The services PMI declined unexpectedly to 46.8 from 48.1 in the prior month. The expected reading was 49.0.
At the same time, the factory PMI fell marginally to the neutral mark of 50.0 in June from 50.1 in the previous month. The score was seen at 50.3.
France's private sector contracted for the sixth straight month in June, albeit at a slower pace, survey data showed. The flash composite output index rose to 47.6 in June from 44.9 in the previous month.
The pace of contraction slowed sharply from May with softer declines in output recorded in both the manufacturing and service sectors. The services PMI climbed to 47.4 from 44.3 seen a month ago. At the same time, the factory PMI registered 50.7 compared to 49.7 in May.
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