Private sector business activity was a little stronger than originally thought last month. The 48.3 flash composite output index was revised up to 48.5 and so now stands 2.1 points short of its final reading in June.

The positive headline revision was attributable to a slightly stronger performance by services where the 52.0 flash sector PMI was boosted to 52.3. Even so, this was still down from June's final 54.1 and the weakest reading since February. The monthly fall largely reflected the first decline in new orders in six months. Employment continued to expand, but the pace of job creation slowed sharply and was only modest. At the same time, business expectations about the year ahead deteriorated.

Meantime, inflationary pressures remained significant and input cost inflation, having touched its lowest level in two years in June, accelerated for the first time in five months. Output prices similarly remained elevated and also increased versus the previous month.

Despite the modest positive headline revision, the July update is disappointingly weak and would be worse but for what remains a reasonably resilient service sector. Indeed, continued inflationary pressures here will not go down well with the ECB. Today's update puts the German ECDI at 3 and the ECDI-P at 4, both measures signalling that, in general, economic activity is moving in line with market expectations.

No revisions are expected to the flash data leaving the composite output index at 48.3 and the services PMI at 52.0.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global.

The Purchasing Managers Index (PMI) survey has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.