|Composite - Level||53.7||53.9||54.2|
|Services - Level||53.8||54.0||54.4|
The Eurozone economy performed a little better than previously thought in July. Hence, the final composite output index weighed in at 53.9, up from its 53.7 flash estimate but still 0.3 points short of its final June mark. At the same time, the flash services PMI was revised 0.2 points firmer to 54.0 to stand 0.4 points below its final level at the end of last quarter.
Within services, new orders, backlogs and employment all made renewed gains although the increase in headcount was the smallest since January. Business expectations fell to a 7-month low but remained above their long-run average. Input costs rose again but, crucially, selling prices were down for a forty-fourth straight month, albeit only marginally.
In terms of the composite output index, amongst the big four countries Spain (58.3) had the best month ahead of Germany (53.7) and Italy (53.5). France (51.5) again lagged some way behind.
Today's report suggests that quarterly growth of the Eurozone economy is running close to the 0.4 percent mark. Greece may have shaved perhaps 0.1 percentage points off this figure but the underlying pace is still frustratingly slow for this stage of the recovery. Moreover, deflation risks are still an issue, notwithstanding the fact that CPI inflation has crept back above zero. The ECB cannot be overly happy.
The Eurozone Composite PMI is produced by Markit and is based on original survey data collected from a representative panel of around 5,000 manufacturing and services firms. National manufacturing data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland.
The Eurozone Services PMI (Purchasing Managers' Index) is produced by Markit and is based on original survey data collected from a representative panel of around 2,000 private service sector firms. National data are included for Germany, France, Italy, Spain and the Republic of Ireland. These countries together account for an estimated 80% of Eurozone private sector services output.
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.
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