Europe News

Euro zone flash PMI slips back in July

Krisztian Bocsi | Bloomberg | Getty Images

Business activity in the 19-member euro zone eased in July, suggesting the recovery lost momentum at the start of the second half of the year, a survey released on Friday showed.

The Markit flash euro zone composite purchasing managers' index, which measures activity in manufacturing and services sectors, fell month on month to 53.7 in July, down from a four-year high of 54.2 in June.

"July's fall in the euro-zone composite PMI offers some early support to our view that the fragile recovery will slow in the second half of the year," Jennifer McKeown, senior European economist at Capital Economics said in a note.

"July's decline reflected falls in the manufacturing and service sector indices and follows yesterday's disappointing drop in euro-zone consumer confidence," she added.

July was a difficult month for the euro zone economy, with a financial crisis in Greece undermining confidence across the region, analysts said.

Markit, which compiled the PMI data, said earlier on Friday that its French preliminary PMI for the service and manufacturing sectors fell to 51.5 in July from 53.3 in June. The German PMI slipped to 53.4 from 53.7 in June.

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Still the headline euro zone PMI held comfortably above the 50-level that separates contraction from expansion.

It also contrasted with news from China, where PMI data published earlier on Friday showed manufacturing activity in the world's second biggest economy tumbled to a 15-month low in July.

U.S. PMI data is released later on Friday.