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Roundup: Eurozone growth slips to weakest since Jan. 2015

Xinhua, June 23, 2016 Adjust font size:

Eurozone business activity growth slowed slightly in June, according to the Markit Eurozone Flash purchasing managers' index (PMI), which edged down to its lowest level since January of last year.

The eurozone PMI fell from 53.1 in May to 52.8, rounding off the worst calendar quarter since the fourth quarter of 2014 amid signs of political and economic uncertainty dampening business activity, according to Markit, a leading global provider of financial information services.

Trends at manufacturers and service providers were subdued during June. Overall growth of new business across both sectors inched only slightly higher, remaining one of the weakest seen over the past year-and-a-half.

Eurozone Services Business Activity Index stood at 52.4 in June, down from 53.3 in May. However, the flash Eurozone Manufacturing PMI grew to 52.6, marking a 6-month high.

A reading above 50 indicates expansion, while a reading below 50 represents contraction.

Prices charged for goods and services in eurozone fell on average in June, according to Markit, sustaining the trend of downward price pressures recorded by the survey almost continuously since late-2011.

However, stronger rates of job creation were seen in both manufacturing and services.

Looking ahead, business expectations in the service sector slipped to an 11-month low in June, Markit said, with companies often citing worries about political change and rising economic uncertainty, albeit with few explicit references to a potential Brexit.

"June's survey data point to steady though disappointingly lackluster economic growth. Rising political uncertainty appears to have caused the pace of expansion to weaken slightly and business confidence about the outlook to deteriorate," said Chris Williamson, chief economist at Markit.

"The second quarter is therefore likely to see economic growth slacken from the solid 0.6 percent expansion seen in the opening quarter of the year to around 0.3 percent," he predicted.

He said the growing of demand at a sufficiently strong pace would sustain reasonably robust hiring, but not strong enough to generate inflationary pressures. Endit