|Composite - Level||52.9||53.2||53.1|
|Services - Level||52.7||52.9||52.8|
Eurozone private sector economic activity was revised slightly stronger in the final July PMI report. The 53.2 composite output index was 0.3 points above its flash estimate and, now, 0.1 points higher than in June.
The improvement was led by a 0.2 point positive adjustment to the flash services PMI which now stands at 52.9. Even so, this was still amongst the weakest outturns posted over the last year-and-a-half and business confidence in the year ahead declined to a 19-month low despite fresh gains in new orders and employment. Moreover, inflation developments continued soft with a rise in input costs too small to prevent the fall in service provider charges stretching to a tenth consecutive month.
In terms of composite output indices, the best performer was Germany (55.3 and a 7-month high) ahead of Spain (53.7 but a 32-month low). Italy (52.2) saw a modest increase in overall activity but France (50.1) was essentially only flat.
The minor positive revision to the July indices still suggests an annual Eurozone growth rate of around 0.3 percent, largely courtesy of what looks to be a decent performance in Germany. Indeed, signs of a slowdown in both Spain and Italy - possibly reflecting rising political uncertainty - and economic stagnation in France hardly provide reason for cheer at the ECB. Accordingly, with deflationary pressures still significant the door to a near-term ECB ease would appear to be wide open.
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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