Business activity in the eurozone was slightly better than predicted in July but growth remained muted and what there was came mostly from a surge in Germany.
Business activity in the eurozone expanded at a slightly better than predicted pace in July.
Surveys of companies’ bosses for the Purchasing Managers’ Index (PMI) compiled by Markit found they have so far largely shrugged off Britain’s vote in late June to quit the European Union.
“A welcome uptick in the final PMI numbers… is especially encouraging as it suggests the region saw little overall contagion from the UK’s ‘Brexit’ vote,” said Chris Williamson, Markit’s chief economist.
However growth remained muted and what there was came mostly from a surge in Germany.
There was continued stagnation in France and output slowed in the next two largest economies – Italy and Spain.
Upward revision means the euro-zone PMI actually increased after Brexit vote – but it still points to low GDP growth pic.twitter.com/Dgnm0tvU9u
— Capital Economics (@CapEconEurope) August 3, 2016
Markit’s Williamson noted: “The survey is still indicating only a modest 0.3 percent quarterly rate of economic growth at the start of the third quarter. Such a meagre pace of expansion will inevitably fuel speculation about what the European Central Bank could and should do to boost growth, and when.”
Growth in the region’s dominant service industry also ticked up from June and firms in that sector hired new staff at the fastest rate since early 2008.
At the same time we learned that retail sales in the eurozone were little changed in June compared to the previous month.
The halt in retail sales growth in June came after the year’s highest monthly rise in May, when consumers spent 0.4 percent more than in the previous month.
— EU_Eurostat (@EU_Eurostat) August 3, 2016
June sales were up by 1.6 percent from the same month last year.
Consumers increased their spending on non-food products but spend less on fuel.