Manufacturing output hit a two-year high as the euro area returned to growth in July. Services also expanded, employment rose for the first time in 2024, and input cost pressures eased sharply. Risks from oil and shipping disruptions remain.
Alpha Score of 51 reflects moderate overall profile with moderate momentum, moderate value, moderate quality. Based on 3 of 4 signals – score is capped at 90 until remaining data ingests.
Eurozone business activity expanded for the first time in four months during July, with the flash composite purchasing managers index rising to 51.9 from 50.0. The reading was the highest in five months, according to S&P Global’s survey, and snapped a stretch of stagnation that had marked the second quarter.
Manufacturing led the turnaround. The factory PMI climbed to 52.0 from 51.4, while the output index jumped to 53.0 – the strongest production growth since March 2022. Services also returned to expansion after three consecutive months of contraction. The services business activity index rose to 51.6 from 49.4.
Stronger demand lifted activity across both sectors, S&P Global said. Employment increased for the first time this year, and business confidence reached its highest level since February.
Germany returned to growth for the first time in four months. Its composite PMI came in at 51.2, up from 49.5. The manufacturing output index surged to 54.7, the highest in more than four years. France remained the weakest major economy. Its composite PMI improved to 49.6 from 47.2, still in contraction but at a shallower pace. The rest of the euro area recorded its strongest expansion in eight months.
Input cost pressures eased to their lowest level since the outbreak of the Middle East conflict, the survey showed. That helped moderate selling price inflation across manufacturing and services. S&P Global said the data should reduce immediate pressure on the European Central Bank to tighten policy further.
Risks remain. The survey noted that renewed increases in oil prices and rising shipping disruptions could quickly revive inflationary pressures and disrupt supply chains. The outlook depends on developments in the Middle East, according to S&P Global.
The ECB’s next policy meeting is in September. The July PMI data will feed into the staff projections that inform that decision.
Prepared with AlphaScala editorial tooling from the source reporting linked above. Indexable analysis may include a cited Alpha Score value. Publishing checks screen each story before release. Educational coverage, not personalized advice.