Business activity in the eurozone appeared to be slowing a little in June, although continued strength from German manufacturers helped offset a softening in Europe's service sectors.
Eurozone purchasing manager surveys indicated that while manufacturing activity in the core EU countries of France and Germany continued to expand strongly in June, growth in the service sectors slowed as consumer spending eased.
Purchasing managers surveyed
The composite eurozone purchasing managers' index (PMI) edged back to 56.6 in June, from 56.8 in May. A number above 50 indicates growth in activity – the higher above 50, the greater the pace of expansion.
Breaking it down, the eurozone manufacturing PMI edged down to 56.8 from 57. While France's expansion accelerated to 55 from 53.8, Germany's slowed fractionally to 59.3 from 59.5. Both June readings beat analysts' forecasts, however.
Activity in the services sector also slowed, down to 54.7 in June from 56.3 in May, slowing more appreciably than forecasts of 56.2.
Service sectors slow
Growth in both Germany's and France's service sectors slowed in June – Germany's to 53.7 from 55.4 and France's to 55.3 from 57.2.
IHS Markit, which compiled and published the surveys, said that while new order growth in the services sectors slowed to the lowest in four months, factories recorded the highest influx of new orders since February 2011.
Companies continued to report high levels of work backlogs which resulted in extra recruitment.
"The strong jobs growth was also a reflection of ongoing elevated levels of optimism about future growth," the report said.
Growth remains robust
IHS Markit's chief business economist Chris Williamson said: "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.
He added: "The upturn is also broad-based, with the surveys signalling an acceleration of GDP growth in both France and Germany in the second quarter, as well as across the rest of the region as a whole."
The euro found support from the data and was 0.2% higher against the dollar at $1.1164 and climbed 0.3% to €1.1401 against the pound.
Slowing activity in Japan
Japan also marked some slowing of activity in manufacturing in June – and not from such a strong base as in Germany, one of its chief industrial rivals.
Manufacturing PMI eased to 52 in June, from 53.1 in May, and confounded expectations of a rise to 53.4.
"Slower growth was signalled in June, with both orders and output rising at the weakest rates since late last year amid reports of a slight softening in market conditions," said Paul Smith, senior economist at IHS Markit.
The yen managed a small gain against the dollar, up 0.1% to Y111.26, but fell 0.1% to Y124.22 against the euro.