Eurozone business activity slows in June

BRUSSELS: Eurozone private sector business activity slowed sharply in June but was still running at more than six-year highs, a closely watched survey showed Friday.

Analysts said that while the downturn in the headline readings was disappointing, the economy continued to put in a strong performance.

Data monitoring company IHS Markit said its June Composite Purchasing Managers Index came in at 55.7 points, the lowest reading in five months and down from 56.8 in May.

The PMI measures companies' willingness to invest in their business and so gives a good idea of how well the underlying economy is performing.

Any reading above the boom-bust 50 points line indicates the economy is expanding.

By sector, the all important services index dropped to 54.7 points in June from 56.3 in May, while manufacturing edged higher, to 58.5 points from 58.3.

Markit said that despite the headline fall in the composite PMI, the 19-nation eurozone economy posted its strongest three months to June in more than six years.

"Job creation remained one of the strongest recorded over the past decade as firms continued to expand capacity to meet rising demand," it noted.

Price pressures meanwhile eased.

IHS Markit chief business economist Chris Williamson stressed that the economy overall continued in sound health.

"Although the PMI data point to some loss of growth momentum in June, the latest reading needs to be looked at in the context of recent elevated levels," Williamson said.

"Despite the June dip, the average expansion in the second quarter has been the strongest for over six years," he said in a statement.

On that basis, IHS Markit expected the economy to grow 0.7 percent in the three months to June, up from 0.6 percent in the first quarter.